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The Fidelity’s Index Funds

I’m going to talk about which of Fidelity’s index funds are the best ones to invest in, and I’m also going to show you how and where to buy them.

Index funds are a great way to get started investing safely, without doing hours and hours of research on individual stocks. They’re the best way to create a diversified investment portfolio that grows your money big time over the long run. And Fidelity is known for being one of the most reputable, low-cost index fund providers in the industry. I also happen to be a long-time user of Fidelity, so not only do I know the platform inside out, but I’ll also take you on a tour of my account so that you can see what investing at Fidelity really looks like. So if you’re interested in buying some Fidelity index funds, then keep reading!

So let’s get right into it!

  • First, I’m going to talk about the most important criteria to look for before investing in Fidelity index funds, or any index fund in general
  • Then, I’m going to give you a list of the best Fidelity index funds that meet these criteria.
  • And finally, I’m going to talk about how to buy them, including how much to buy and in what combination.

What is Index Fund?

First off, I don’t want to assume anything, so allow me to explain what an index fund is before I get into all the other stuff. An INDEX FUND is a pooled investment vehicle that gives you an instant slice of ownership in hundreds of different stocks, all in one easy purchase. It’s called an index fund because the stocks in the fund are chosen by an index, rather than by some super-smart, overpaid money manager. Indexes you might have heard of are the S&P 500, the Nasdaq, and the Dow Jones. So an S&P 500 index fund will have all the 500 stocks in the S&P 500 index. And a Dow Jones index fund will have all 30 stocks in the Dow Jones index.

Ok, now with that out of the way, let’s talk about what criteria to look for in Fidelity index funds.


First Criteria

There’s a couple of things you want to look at when buying an index fund, and the first thing is the expense ratio. The expense ratio is how much money is being skimmed off the top from your investment every year. In other words, it’s an annual fee for investing in the fund. If you want to avoid paying this fee, your only other alternative would be to go out and buy every single stock in the fund yourself. That’s obviously quite labor-intensive and not feasible, so I certainly don’t mind paying a fee to the index fund to do all that work for me. That being said, I want to keep that fee as low as possible. What can I say, I’m cheap!

A good rule of thumb is to look for an expense ratio of under 0.20%. For example, here’s a Fidelity index fund, the Fidelity Total Market Index Fund. If you invested $1000 in this fund, you’d pay an annual fee of only $0.15. Peanuts! However, if you invested in this fund, the Fidelity Women’s Leadership Fund, your annual fee would be 1.12% or $11.20 a year. It doesn’t sound like a huge difference, but compounded over time, a small difference in fees adds up to hundreds of thousands of dollars! Don’t believe me? Check this out:

This chart the difference that fees make in your investments. A difference of 1% in annual fees reduces your nest egg by $42k at the end of 30 years! Crazyyyyyy. So when you’re looking to invest in Fidelity index funds – or any index fund in general – the expense ratio is the #1 criteria. To find a fund’s expense ratio, just pull up the fund summary page, and look for the section that says “Gross Expense Ratio”. Again, you’re looking for funds with an expense ratio of 0.20% or less.

Second Criteria

The second criterion to look for is the automatic reinvestment of your dividends. Let me explain: When you invest in the stock market, you get dividends monthly or quarterly, and they look something like this. And every time you get a dividend deposit, you don’t want that cash to just sit there. You want to use that cash to buy more stocks. That way, you can make money on your money. Your dividends buy you more stocks, which in turn pays you more dividends, which you use to buy more stocks – and so on and so forth. That’s called compound interest, and omg, it’s like the best thing ever!

This chart shows you the difference between reinvesting your dividends and NOT reinvesting your dividends. If you invested $100k to start and you reinvest your dividends as I told you, you’d have $152,662.49 today. But if you didn’t reinvest your dividends, you’d have only $81,963.34. Moral of the story? Reinvest your dividends.

Two Forms of Index Funds

And the way to do that is by investing in Fidelity index funds that are MUTUAL FUNDS, not ETFs. Index funds can come in two forms –  mutual funds and ETFs. For example, you can invest in an S&P 500 mutual fund, or an S&P 500 ETF. The end result with either is that you’ll own a slice of the S&P 500 index. However, ETFs don’t do automatic reinvestment of your dividends. Only mutual funds do! So the second criteria to look for when buying Fidelity index funds is to make sure that it’s a MUTUAL FUND, not an ETF. The way to do that is by pulling up the ticker symbol for the fund, and confirming that it says “Mutual Funds” up here in the upper left corner.

Third Criteria

Ok, and now for the third criteria: transaction fees. Transaction fees are whatever the fund charges you to buy into the fund and to cash out of the fund. Some funds charge you for both, other funds don’t charge you for anything. Obviously, we’re going for the funds that don’t charge you anything. That’s right! We’re looking for free 99!

The good news is, if you have an account at Fidelity, you’re not going to pay any transaction fees to buy any of Fidelity’s mutual funds. But if you have an account at Vanguard, for example, they’ll probably charge you a transaction fee of like $50 or something crazy if you want to buy a Fidelity fund. So bottom line: if you have your brokerage account at Fidelity, you won’t have to worry about transaction fees.

The best fidelity index funds

Ok and now for the best Fidelity index funds! First of all, these are all mutual funds, no ETFs on this list, because I strongly believe that dividend reinvestment is a non-negotiable feature. Second of all, this list of funds is not an explicit recommendation to buy – it’s just a resource to help you jumpstart your research. So with that disclaimer out of the way, here we go!

For domestic stocks, Fidelity Total Market Index Fund or ticker symbol (FSKAX), the expense ratio of 0.015%

For international stocks, Fidelity International Index Fund (FSPSX), the expense ratio of 0.035%

For emerging market stocks, Fidelity Emerging Markets Index Fund (FPADX), the expense ratio of 0.075%

For U.S. government bonds, Fidelity Intermediate Treasury Bond Index Fund (FUAMX), the expense ratio of 0.03%

For U.S. government bonds, Fidelity Inflation-Protected Bond Index Fund (FIPDX), the expense ratio of 0.05%

For real estate, Fidelity® Real Estate Index Fund (FSRNX), expense ratio 0.07%

I made a handy PDF download for you with a list of all these funds, their ticker symbols, and expense ratios, and links to the Fidelity fund summary pages, so grab it HERE!

How to buy fidelity index funds

And now, let’s talk about how to buy these funds. Once you decide which fund you want to buy, the rest is super easy. You type in the ticker symbol in the search bar, pull up the fund summary page, and click BUY.

You’ll see that you need to specify a dollar amount. All of the funds I mentioned here have no investment minimums, so you can literally buy $1 if that’s all you have.

But assuming you have more than $1 to invest, the question you need to ask yourself is how much to buy of each fund – in other words, what asset allocation you want. Asset allocation is the particular mix of investments that you have in your portfolio, and it’s THE number one decision you need to make before you pull the trigger on any of these Fidelity index funds. For example, if you have $10k of investments and $5k of that is in stock funds, and $5k is in bond funds, then your asset allocation is 50% stocks / 50% bonds. Generally, the longer your time horizon, the more you want to have in stocks. It’s also a good idea to mix in other asset classes, like real estate, in order to make your portfolio as bulletproof as possible throughout any economic conditions.

The most basic asset allocation is doing a split between stocks and bonds. Jack Bogle, the founder of Vanguard and also considered by many to be the OG of index funds, recommends subtracting your age from 100 and owning that much in stocks. So if you’re 30 years old, you’d own 70% in stocks, and 30% in bonds. If you’re investing $10k into Fidelity index funds, then you could buy $7k of Fidelity Total Market Index Fund (FSKAX) and $3k of Fidelity Intermediate Treasury Bond Index Fund (FUAMX).

Here’s a slightly fancier asset allocation, recommended by David Swensen, who’s the legendary manager of Yale’s endowment fund. He helped Yale grow its endowment fund from $2b to $27b over the last 34 years, so to me – whatever he recommends is gold. He recommends the following asset allocation:

David Swensen recommendation:

  • 30% in Domestic Equity
  • 15% in International Equity
  • 10% in Emerging Markets
  • 15% in U.S. Treasuries
  • 15% in inflation-protected U.S. Treasuries
  • and 15% in real estate

So if you have $10k to invest and you’re using Fidelity index funds, your portfolio would have 6 different funds in it and look something like this:

Again, you can refer to my free PDF download, which I’ve linked in HERE. It has all this info in there, with pie charts that explain these recommended asset allocations as well as a list of the Fidelity index funds you can use.


So there you have it! Now you know:

  • What criteria to look for when investing in Fidelity index funds
  • You have a list of the best Fidelity index funds that meet these criteria
  • And you also know how to buy them and how much to buy of each

Investing doesn’t have to be hard or complicated. Index funds are the best way for a beginner to start. Investing with low-cost index funds using a proven asset allocation (like the ones I showed you by Jack Bogle and David Swensen) is a no-brainer way to create lots of wealth over the long run. If you’re sitting on some cash and you want to start putting your money to work, I highly recommend choosing one of those asset allocations and getting started asap with Fidelity index funds. The key here is to start now, perfect later! Because every day you wait is another day when your hard-earned money isn’t working for you.

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YouTuber, Money Expert, Educator, Traveler, Rebel, and #1 Book Nerd. My mission is to empower you with the mindset and financial know-how to create a life of TOTAL freedom.


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YouTuber, Money Expert, Educator, Traveler, Rebel, and #1 Book Nerd. My mission is to empower you with the mindset and financial know-how to get more of what you want out of life.