Are These The Best Fidelity 401k Investment Options In 2022?

Retirement Finance Oct 30, 2022
Fidelity 401k Investment
Fidelity 401k Investment [Photo Credit: Envato (Licensed)]

If you have a retirement account with Fidelity, you may be wondering what the best investment options that you can choose are. Fidelity offers an impressive list of over five hundred mutual funds. It is even more challenging to decide which funds are suitable for your retirement account. In today’s post, we’ll lay out the best Fidelity 401k investment options and provide insight into each of them.

Which Fidelity Roth Ira Is Best

Every Fidelity Investment options have its advantages, are some of the best performing Fidelity 401k Investment Options;

Fidelity Low Priced Stock Fund (FLPSX)

Expense Ratio: 0.65%

This fund is designed to allow investors to participate in the long-term growth of U.S. equities by putting investments in a diversified portfolio of large-cap, mid-cap, and small-cap stocks.

It seeks to achieve its investment objective by investing in stocks of companies with market capitalizations generally ranging from $2 billion to $8 billion or larger. The fund has no geographic restrictions on its investments and may invest up to 20% of its assets in foreign issuers.

The fund expects to hold approximately 100 securities at any given time, and it invests at least 80% of its assets in common stock securities (including common equity securities). The remaining 20% of its assets may be invested in debt securities rated “investment grade” or higher by two or more independent credit rating agencies (or equivalent standards).

Fidelity Investment Grade Bond Fund (FBNDX)

Expense ratio: 0.45%

Investing in Fidelity Investment Grade Bond Fund is a good choice when even the investment-grade corporate bond market is under duress.

Analyzing the past performance of FBNDX reveals that it has historically outperformed investment-grade corporate bond benchmarks.

FBNDX is a bond fund that holds shorter-term bonds and has a duration of 5.6 years, but it reduces risk with substantial allocations to U.S. government debt, one reason why the fund is weathering some of this year’s volatility in the bond market

FBNDX’s non-government holdings are rated at AAA or A.A., indicating that the fund is currently emphasizing higher quality fare.

Over the past month, this four-star fund has paid investors 1.78% annual interest on its investments.

Fidelity Large Cap Core Enhanced Index Fund (FLCEX)

Expense Ratio: 0.39%

Fidelity Large Cap Core Enhanced Index Fund (FLCEX) is an open-end fund managed by Fidelity Investments. The fund invests in large-cap stocks of well-established companies whose earnings are expected to grow over long periods.

The portfolio managers focus on investing in companies with strong business models and wide economic moats, and well-managed. The fund does not invest heavily in individual stocks or sectors.

Instead, it invests in broad market indexes such as the S&P 500. The portfolio managers use quantitative techniques to identify stocks with high potential for capital appreciation and low volatility.

Fidelity Strategic Dividend & Income Fund (FSDIX)

Expense ratio: 0.71%

This is an exciting option for dividend investors because it invests in equities and other assets.

Instead, fund managers have the flexibility to use other income-generating asset classes in their investment mix, including preferred stock, convertible bonds, and real estate investment trusts (REITs).

Adam Kramer has managed this fund since 2007, with Ford O’Neil coming on board in 2012 as co-pilot. Over the past five years, Morningstar found that Ford O’Neil’s strategy consistently outperformed above average.

From June 2012 to March 2019, its annualized return of 10.2% significantly outperformed the 8.5% category average and 9.5% index returns. Only 53.1% of FSDIX is allocated to equities, which may be advantageous in this climate and help reduce volatility; its exposure to asset classes that are inversely correlated with interest rates should also help long-term performance.

Fidelity Multi-Asset Income Fund (FMSDX)

Expense ratio: 0.85%

Fidelity Multi-Asset Income Fund is a good choice for investors who want to balance their holdings between bonds and stocks.

Investors seeking high dividend payments should consider FMSDX because it offers a 4.82% yield over 30 days.

That’s largely due to the fact that 55% of its weight is allocated to investment-grade and junk corporate debt, two classes of assets that have been hit hard in the new bear market.

The fixed income allocation of FMSDX has historically been 30% to 50%, reflecting the fund’s focus on equities.

With the bond market’s wide range of opportunities and low-interest rates, FMSDX may have an edge in its ability to adapt quickly.

Fidelity ZERO Extended Market Index Fund (FZIPX)

Expense ratio: 0%

Fidelity ZERO Extended Market Index Fund (FZIPX) is a smart choice for investors who wish to fill in the gaps 0f large-cap blend funds. Like its sister fund, FZROX, it has 0% transaction costs and no loads, so it’s essentially free!

But the low/no-cost structure is a big part of what makes it useful. FZIPX, like other mid-cap blend funds, is intended to complement large-cap index funds by investing in smaller companies that are ignored by major benchmarks such as the S&P 500.

FZIPX has the smallest sector weight in its energy-ranking index. FZIPX has dropped almost 40 percent year-to-date, illustrating the theory that attractive Fidelity funds can be great long-term investments when market conditions improve.

Fidelity Balanced Fund (FBALX)

Expense Ratio: 0.51%

Balanced funds are mutual funds that own a mix of stocks and bonds, aiming to generate both capital appreciation (from owning stocks) and income (from owning bonds).

Fidelity Balanced Fund holds 65% in U.S. equities, 4% in international equities, and 31% bonds, making it a complete portfolio rolled into one fund.

Total returns of FBALX over the past three, five, and 10 years have beaten the blended Fidelity Balanced Hybrid Comp Index. Compared with its benchmark index, average annual returns have been stellar, handily winning each contest.

The fund invests in equities (stocks), bonds, and preferred stocks from all credit score ranges. In addition to its core strategy, FBALX may also employ leverage strategies that seek higher returns by borrowing money.

Those who want a fund that actively manages its investments and has a history of strong returns can consider FBALX.

Conclusion On The Best Fidelity 401k Investment Options

As with any investment, the final factor will always be your personal preferences and financial situation when choosing the best funds for a fidelity Roth IRA. There are a lot of different investment options that one can choose from when using the Fidelity 401k.

Some people prefer the stock option, while others prefer the Alpha equity option. The unique thing about this Fidelity 401k is that it gives you different options to choose from, and some of these choices are stocks, bonds, mutual funds, and exchange-traded funds ETFs.

There is also the choice of making your portfolio by mixing all these investment options or by choosing specific ones, depending on what you want.

Besides Fidelity 401k Investment options, get to know:

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