7 best loyalty funds in 2023 (2023)

The Fidelity 500 Index Fund can be the key to diversificationinvestment portfolio. It gives exposure to the S&P 500, a benchmark index that generally serves as a proxy for the entire US stock market. The index tracks the top 500 US public companies.

FXAIX is a high-tech fund with around 26% of its money workinginformation technology stocks, including many of the most famous names in the industry. However, this passively managed fund still charges a very low annual fee.

Most of FXAIX's approximately 500 holdings are growth companies. Many professional managers generally believe that most of the assets they hold are high-quality stocks with above-average growth and strong prospects for further growth.

FXAIX is more diverse than most of its peers. Its top 10 holdings represent less than about 30% of the fund. It outperformed its comparable large-cap Morningstar group over several multi-year periods.

Investors who aim to own companies that meetenvironmental, social and management measureswill appreciate the low annual fee and decent dividend yield offered by Fidelity U.S. Sustainability Index Fund. Due to the fund's ESG benchmark requirements, the fund's portfolio does not include top companies such as Apple (AAPL), Amazon.com (AMZN) and Berkshire Hathaway (BRK.B).

The 10 largest FITLX holdings account for approximately one-third of the entire portfolio. This increases the dependence of the fund on the performance of these names. Despite this, it is diverse, with a total of around 270 farms. He leans towardslarge-cap stocks, while mid-cap stocks are the second favourite. Growth stocks are a clear preference.

Currently, the fund's favorite sector is technology, where about a quarter of its money works.health actions, financial services and consumer goods are his next three favorite sectors. Shareholders looking for a fund that allows them to invest in line with their values ​​while earning competitive returns and dividends at a relatively low annual fee may consider FITLX.

The Fidelity Mid Cap Index Fund is rated Gold Star by Morningstar, the highest rating of the research firm. This demonstrates the company's belief in FSMDX's ability to outperform its peers in a typical market cycle.

FSMDX offers a mix of growth, value and fundamental stocks mainly inmedium sizerange. Mid-cap stocks have a proven track record of outperforming. This is because we are smaller and more agile than larger rivals.

The fund avoids stocks from the top 200 US companies. With a portfolio of around 800 stocks, FSMDX is well diversified. His top 10 stocks account for only about 5% of the fund. Morningstar predicts that FSMDX's profit growth rate over the next five years will outperform its category and the Morningstar Index. Technology and industry are the largest sectors of the fund. Financial Services, Cyclical Consumption and Healthcare are the next biggest items in FSMDX.

The Fidelity Nasdaq Composite Index Fund offers access to over 3,000 of the world's fastest-growing stocksHigh tech Nasdaq compositeindex. In fact, approximately 45% of the fund is invested in IT stocks. Well-known technology names Apple (AAPL), Amazon.com (AMZN), Microsoft (MSFT), Alphabet (GOOG), Tesla (TSLA) and Meta (META) are among the top 10 holding companies.

FNCMX's 10-year average annualized return is one of the best of our Fidelity fund picks, but its heavy tech weight makes it volatile. The majority of the fund's assets are equities of large capitalization companies. Growth stocks dominate. Sticking to your index keeps the fund's annual turnover ratio low and its annual fee manageable. It has topped its Morningstar category for the last 10 years.

If you can handle the extra volatility, this fund is worth a look if you want one too.growth action strategy.

The Fidelity Small Cap Value Fund can be a strategic way to play the market at the right time. I like this?small-cap stockssince 1926, they have outperformed large-cap companies in terms of average annual return. In addition, value stocks tend to outperform bear markets and economic downturns. As a result, investors who believe markets and the economy will face challenges this year may want a fund like FCPVX.

And no matter how the markets and economy behave this year, if you are an investor who wants exposure to all corners of the market, FCPVX can be a good way to play.small capitalization valuefor longer period of time. The fund selects small-cap stocks that its managers believe are undervalued on factors such as assets, sales, earnings, growth potential or cash flow.

FCPVX has outperformed the Russell 2000 Value Index and its Morningstar benchmark group for the last few long periods. Keep in mind that the last time the fund paid a dividend was December 2021, so investors looking for cash flow should look elsewhere. Still, it is a solid option for those who want an actively managed small cap value fund from a reputable family of funds.

Fidelity Corporate Bond Fund can fill an important niche in your portfolio. Provides diversification by balancing equity funds in your portfolio. It can also provide cash flow.

bond fundsthey have their own risk. One of the main ones is that as interest rates rise, bond values ​​fall. Still, after raising interest rates to their highest level in 16 years, the Federal Reserve has signaled it may hold off on any hikes. Interest rates are expected to fall in the coming years, providing patient investors with capital growth as the price of the fund increases.

FCBFX Offersfixed income investorswide diversification. Approximately 70% of the fund's more than 600 assets come from US issuers, with the remainder from international issuers. Over 90% of the fund's investments are investment grade and over 80% of its investments are rated A or BBB. Corporate bonds account for approximately 90% of the portfolio.

Interest rates skyrocketed. Currentlyfederal funds rate ranges from 5% to 5.25%, following ten consecutive Federal Reserve rate hikes since March 2022. Rising rates have allowed money market mutual funds such as Fidelity Government Cash Reserves to reward investors with increasingly higher returns.

What aboutThe risk of insolvency of US Treasury bondsif Congress fails to raise or suspend the federal debt ceiling? How vulnerable is FDRXX to Treasury debt?

Fortunately, FDRXX is largely insulated from the potential risk of insolvency. As of April 30, less than 2% of its portfolio consisted of Treasury bonds, coupons and banners. Instead, around 90% were repurchase agreements and floating rate bonds from government agencies. Repurchase agreements or "repos" are essentially one- or two-day loans to the Federal Reserve, backed by the collateral and credibility of the Fed. The Fed has its own money and is not bound by the Treasury's statutory debt limit.

FDRXX is slightly more conservative and stable than money market mutual funds, which focus on short-term commercial debt. In the face of uncertainty and volatility in the stock market, FDRXX can be a ballast for your portfolio.