Fidelity Index Funds

The term index fund is a mutual fund that is framed on a platform that it can track market index. When you say track, it means the investment that the portfolio manager has made according to a certain market index. Fidelity on the other hand is the global provider of mutual funds as well as other financial services. The replication done in index fund is irrespective to the market conditions and prediction by experts. This type is called the passive fund management. The advantages of using the Fidelity index fund are that there is a much lower risk if you compare to other types of funds. The index gives off a much larger market exposure and the whole investment operation expenses are lower than other mutual funds. Today, there are about 300 Fidelity mutual funds in the market. They have varying objectives that are made to tailor fit individualized investment plans.

Fidelity Spartan 500 index fund
This fund is the largest publicly traded companies in the United States exchange and its nearest competition is the Vanguard 500 index fund. However unlike Vanguard 500 that charges 0.15%, the Spartan 500 charges lower expense ratio of 0.10% on accounts between $10,000 and $100,000. Fidelity also sells without charging brokerage fee at hundreds of retails all over the United States. If your investment reaches more than $100,000, the cost ratio converges which means that the difference does not compound forever. If you want a lower expense ratio and have the money to invest then Fidelity index funds is a great option. As compared to Vanguard 500, this option is better.

Domestic stock funds
Fidelity actually offers a lot of domestic stock mutual funds. These funds are invested in either ownership of American companies or stocks. They have varying objectives, from producing income for stockholders in dividend forms to accomplishing highest growth achievable.  The Fidelity contrafund is one of the most popular types of Fidelity domestic stocks. These have been out in the market for a very long time. Fidelity index funds on the other hand such as Fidelity Spartan is a purchase stock that is based on the market index such as Poor’s 500 and The Standard. This type has very low costs as compared to other stocks.

Fidelity bond funds
Fidelity bond funds on the other hand is perfect for investors who want to take lesser risk and would want to diversify the risk. Bonds have the ability to rise in value; however they can also develop profit in forms of interest payment on the bond. Bond funds are invested in business debt – they buy the long term and the short term debt obligations and then issue them as bonds. You will see that tax free bond funds are available to help lessen the tax liabilities of bond investors. The Fidelity Total Bond Fund invests in a broad based bond fund portfolio. Fidelity offers the bond funds with different objectives. The Fidelity GNMA on the other hand is investing in mortgage securities.

International funds
The international funds come in the forms of stocks or bonds and these are invested in overseas businesses. The international funds are very important in a diversified international economy. A lot of regional funds are invested in businesses located in certain areas globally like the Fidelity China fund for the China region. The Fidelity Global Balanced Fund takes a wider based approach. Their investment is basically diversified out. The international funds can vary more in their value than other types of Fidelity index bonds and are riskier.

Money market funds
Fidelity money market funds are the type of investment where the money is invested in secured short term obligations. There is very little risk involved in this. The money market funds are the investment vehicle that people uses to invest money so that they are kept liquidated. On exchange for the liquidity, the returns are lower than other types of Fidelity index funds. The most popular money market funds are the government mutual funds and the Fidelity cash reserves. These can be both taxable and non taxable. IRA money market funds are very popular amongst people that are nearing their retirement age. As the money is liquidated, it’s always ready for withdrawal. However because of the profits, financial advisors recommend young investors to take up the riskier investment.

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