Ethics issues : The news hasn’t always been pleasant out of Boston, and Fidelity has found itself in the center of a few controversies over the years.The index funds offer competitive fees, but the cheapest active fund charges a 0.59% net expense fee. International funds are expensive : Fidelity has six international index funds and 25 actively-managed international funds.Yes, Lynch and Danoff are worth the extra fees, but most active managers still fail to beat index funds. Not enough index funds: Of the 288 Fidelity mutual funds open to new investors, 235 are actively managed and 53 are indexed.Even risk-averse investors have options with money market and bond funds. As of this writing, 288 mutual funds are open to new investors, including some which track real estate and commodities benchmarks. Variety of investment options : Fidelity offers mutual funds in every corner of the market.
Strong management : The Johnson family, which has been guiding Fidelity for over 70 years, has made some home run hires in Lynch and Danoff.Vanguard’s S&P 500 mutual fund (VFINX) carries a 0.14% net expense ratio. For example, Fidelity’s S&P 500 index fund (FXAIX) carries a 0.015% net expense ratio and there is no minimum investment requirement. Low fees : Fidelity mutual funds often rival the low-fee options of Vanguard or Charles Schwab.For a more in-depth look at Fidelity, read Benzinga’s Fidelity Investments Review. Weigh the pros and cons of Fidelity mutual funds before you commit to purchase. Magellan handily beat Vanguard’s S&P 500 mutual fund over the course of Lynch’s term as manager Pros and Cons of Fidelity Mutual Funds Lynch started with $18 million in assets in 1977 and by the time he bowed out in 1990, the fund had grown to $14 billion. Between 19, Lynch averaged a 29% annual return, blowing away the S&P 500 and making jealous rivals out of every asset manager in the country. Introduced in 1963, Magellan rose to fame during Peter Lynch’s amazing 13-year run as manager. Magellan might be the most famous mutual fund in the world. Amazon and Facebook made up over 13% of the fund’s holdings as of September 30.
Contrafund is classified as a large growth mutual fund. For the last 27 years, the fund has been managed by William Danoff, who has consistently beaten his peers (and in recent years, the S&P 500). The Contrafund (FCNTX) is a $112 billion behemoth that began trading in 1967. Fidelity has two mutual funds known around the investment world: the Contrafund and the Magellan fund. Over the last few decades, Fidelity has expanded to provide retirement planning services, wealth management, and life insurance products, but its bread and butter remains brokerage services and mutual funds.