In fact, the most difficult task in selecting the best Fidelity funds is narrowing the list down to just five mutual funds. So to make to make our job easier, and more useful for you in building a portfolio, we picked one mutual fund each representing five different categories that you can hold for years, or even decades.
With that said, here are five of the best Fidelity mutual funds you can hold until you die.
Fidelity 500 Index (FUSEX)
Expenses: 0.095%, or
Any respectable list of mutual funds to hold for the long term must include cheap index funds, and Fidelity 500 Index (FUSEX) is one of the best to buy.
When investing for long periods of time, it's smart to use low-cost index funds. Their low expenses and passive management tend to outperform the higher expenses and human fallibility that make it nearly impossible for the vast majority of actively managed funds to beat the major market indices for time periods longer than a decade.
Rock-bottom expenses, tight index tracking and hundreds of top quality large-cap U.S. stocks like
Fidelity Contrafund (FCNTX)
Expenses: 0.71%
Some of Fidelity's best funds are actively managed funds, such as Fidelity Contrafund (FCNTX), that have seasoned managers and outstanding performance records.
Not many actively managed funds can beat index funds in the long run, but FCNTX has the history to prove that this monumental feat can be accomplished.
The average annual return since its 1967 inception is an amazing 12.2%.
As its name suggests, Contrafund holds stocks with valuations the management believes are not fully recognized by the market. That means FCNTX shareholders will get access to growth stocks like
Fidelity Mid Cap Enhanced Index (FMEIX)
Expenses: 0.6%
Mid-cap stocks have the potential of beating large-cap stocks and small-cap stocks in the long run, and Fidelity Mid Cap Enhanced Index (FMEIX) is among the best mutual funds to capture this part of the market.
Often called "the sweet spot" of capitalization, mid caps generally have greater long-term growth potential than large caps but lower market risk than small caps.
Although FMEIX has only been around since December of 2007, the 6.5 years of performance history suggest that this mid-cap index fund has what it takes to be a long-term winner. For example, the five-year annualized return of 10.7% beats 92% of all mutual funds in the mid-cap blend category.
Part of the fund's success can be attributed to its strategy. Like many other mid-cap index funds, FMEIX holds stocks, such as
But the "enhanced" aspect of the fund's strategy has it focusing on stocks selected by computer-aided, quantitative analysis, for the purpose of finding mid-cap stocks that can outperform the benchmark.
Fidelity Select Biotechnology (FBIOX)
Expenses: 0.73%
Biotechnology stocks can see significant short-term volatility but the long-term fundamentals still look very positive for this area of the health sector and for funds like Fidelity Select Biotechnology (FBIOX).
When taking a long-term, big-picture view, biotech stocks like FMEIX top holdings
But shareholders who want to see returns like these need to be able to hold on during the big declines, such as those in the first half of 2016, when biotech stocks fell as much as 25% or more.
Fidelity Total Bond (FTBFX)
Expenses: 0.45%
Among the best of Fidelity funds to hold for the fixed income portion of your portfolio is
And when the holding period is for years or decades, it's tough to beat the total bond fund's advantages of low expenses and a smart balance of passive and active investing that are parts of success in long-term investing.
FTBFX tracks the Barclays Aggregate Bond Index, although the fund employs some active management strategies, such as adding more exposure to high-yield bonds or using derivatives for leverage and risk management.
This investment style has paid off for shareholders in the past, as evidenced by the fund's 10-year annualized return of 5.5%, which edges out that of 5.1% on the Barclays Aggregate Bond Index.
Kent Thune writes for InvestorPlace.