Long-term investments help investors meet financial goals like purchasing property or paying for children’s education. Furthermore, investing provides significant returns to offset future expenses incurred as an investor gains returns from his or her investments.
Investors can make significant investments through SIPs by investing in equity-based mutual funds offering higher returns over time.
1. Fidelity Growth Company
Fidelity’s longstanding history in mutual fund management speaks for itself; one of its first notable efforts was launching active funds such as Peter Lynch’s Magellan Fund from 1977 until 1990. Additionally, their Fidelity Growth Company fund (FDGRX) has outshone S&P 500 returns over two decades and consistently ranks among Morningstar’s Large Growth category top-performing funds.
This fund seeks capital appreciation by investing primarily in common stocks of domestic and foreign issuers with above-average growth potential as measured by earnings or revenue. It uses fundamental analysis of each issuer’s financial condition, industry position, market conditions, economic trends, and regulatory considerations in its selection process. This non-diversified fund can be considered moderately aggressive as its domestic and foreign securities fluctuate in regulatory decisions or market movements. At the same time, foreign investments also present additional risks, such as currency fluctuations, political or social instability, and changing laws and regulations that can impact its assets over time.
Investment research firm Morningstar assigns each fund a five-star rating. While those with top ratings may make excellent choices for your 401(k), they must always fit within your risk profile and investment horizon.
FDGRX boasts a modest annual expense ratio of just 0.82%, typical for Large Growth funds. Although this expense ratio may be higher than what would be seen from low-cost index funds, given FDGRX’s track record, this expense ratio seems reasonable given its track record.
The fund’s holdings may seem diverse but heavily weighted toward large-cap U.S. companies. For example, as of March 31, FDGRX held shares in tech titans Berkshire Hathaway and Microsoft, as well as Apple and Meta. Furthermore, it had slightly overweight positions in information technology and health care while underweight consumer cyclical and industrials — which may be seen as an ideal balance; however, recently, these sectors have experienced underperformance; in fact, its total return has declined.
2. Fidelity Healthcare Trust
Investments are made primarily in equity securities of companies engaged in discovering, developing, producing, or distributing products related to scientific advancement in health care. At least 80% of net assets (plus any borrowings for investment purposes) is typically allocated towards securities of healthcare-related companies – typically biotechnology, pharmaceuticals, medical research & development, life sciences tools & services, and managed healthcare and equipment & supplies are covered.
Healthcare stocks have been among the best-performing sector groups this year and the most volatile. This volatility can be attributed to worries that the U.S. economy is nearing the end of an expansion and that recessionary pressures will increase, compounded with rising interest rates and mean-reversion rotation that has negatively impacted both equipment manufacturing and services industries in health care.
This quarter’s underperformance relative to the MSCI Health Care Index may have been partly attributed to underweighting some industries that exceeded expectations – notably pharmaceuticals and biotechnology. Healthcare distributors and managed care helped boost relative performance against the sector index. Furthermore, Penumbra’s overweight position surged after it posted better-than-expected financial results, increasing optimism that rate hikes might stabilize.
Information provided herein is obtained from reliable sources, but we make no assurances regarding its accuracy or completeness. Nothing herein should be seen as investment advice or a recommendation of any security, either bought or sold; rather, it should only be seen as generalized information and not as legal or tax advice. Our investments may involve risk – including possible principal loss – outlined in its prospectus for investors to review before investing.
3. Fidelity Small-Cap Growth
With an 8.65% 5-year total return, this fund ranks in the top third of all funds in its category. Small-cap stocks tend to exhibit greater volatility than larger caps and may even outstrip S&P 500 index volatility, offering investors who take more risk more significant potential gains.
This fund invests primarily in domestic small-cap growth companies. However, it may also invest in foreign small-cap companies or common stocks traded over-the-counter market. When selecting securities for this fund, fundamental analysis of each company’s financial condition, industry position, and economic trends/expectations are used as criteria for selection.
Investors considering this fund should keep its high portfolio turnover rate in mind; this can create more trading opportunities that reduce returns overall and subject the fund to interest rate and market risks.
Contrary to most active funds, this fund follows an index and therefore does not have an active manager who makes investment decisions on behalf of investors. With low fees associated with its management, this passive option offers investors an easy and stress-free investment approach to stock market investing.
The expense ratio for this fund stands out as one of the lowest among similar offerings; that represents significant savings considering most mutual funds charge around one percent annually in fees and expenses.
Charles Schwab is one of the best-recognized names in the investment business, and this fund was launched under his sponsorship in 1997. It boasts an excellent track record and can easily be purchased via nearly all major online brokers; however, before investing in any mutual fund, you should carefully review its investment objectives, risks, charges, and expenses of each fund or annuity as well as its investment options before reading its prospectus or summary prospectus; for this, please reach out directly to that fund or annuity; additionally, it should be read carefully before investing, as all investments could result in losses including principal loss.
4. Fidelity Technology Trust
Since its launch, the Fidelity Technology Fund has proven itself an outstanding performer, consistently outshone most benchmark index funds such as FTSE Global All Cap and the S&P 500. Furthermore, its cost ratio compares favorably against its competition, making it an attractive option for investors.
The fund invests most of its assets in stocks of companies creating or offering technological advances and improvements, products or services based on them, or using them themselves. A portion of the support is also dedicated to stocks developing disruptive technologies that threaten existing businesses, business models, and value networks.
Over the past decade, technology companies have become economic darlings, offering investors tremendous returns. Over this period, mega-cap tech titans such as Apple, Amazon, Microsoft, and Alphabet accounted for as much as 22% of S&P 500 revenue; such returns may tempt investors to chase after technology stocks’ success; however, investors should keep in mind their high volatility.
As with any fund, investing in Fidelity Technology Trust entails risks. The value of domestic and foreign investments may fluctuate in response to market, political, or economic developments; additionally, its assets tend to focus on one sector rather than being evenly spread out, like more diversified funds or the market overall.
For 20 years, the Fidelity Global Technology Fund W GBP has been one of the top-performing mutual funds. But investors should remember that past performance does not guarantee future results. While technology remains an impressive sector today, its position may change or have a resurgence later. Therefore, you should diversify your portfolio with other technology-related investments.
Before investing, investors must carefully consider each fund’s investment objectives, risks, charges, and expenses before making their choice. You can find this information by calling Fidelity representatives or visiting FidelityFunds.com/funds. Investing in any mutual fund involves risk, including a possible loss of principal.
