Mutual Fund Research & Historical Results | Fidelity Investments

• Apr 29, 2026
• author

If you have ever looked into investing for the long run, chances are you have come across the name Fidelity Investments. They are one of the biggest players in the game, and for good reason. The company offers a wide range of products, but their mutual funds are what many people turn to first. Whether you are saving for retirement, trying to generate some monthly income, or just want your money to grow over time, there is likely a Fidelity mutual fund that fits your situation.

What makes Fidelity mutual funds stand out is the sheer variety. You have index funds that charge next to nothing, actively managed funds where experts pick stocks for you, and even funds that focus on specific things like technology or gold. This guide walks you through the main options, how they have performed recently, and what you need to watch out for before handing over your money.

The Basic Idea Behind Fidelity Mutual Funds

Fidelity has built its reputation on research. They employ hundreds of analysts who travel the world, talk to company management teams, and dig through financial statements. The goal is to find investments that the market has mispriced. That is the active management side of the business.

But Fidelity mutual funds also include a bunch of passive options. Take the Fidelity 500 Index Fund as an example. It simply tracks the S&P 500 and charges only 0.01 percent per year. That is incredibly cheap. So whether you believe in active stock picking or you prefer to just match the market, Fidelity mutual funds have something for you.

Target Date Funds and How They Work

Target date funds are popular inside retirement accounts, and Fidelity mutual funds have a whole series called the Freedom funds. The idea is simple. You pick a fund with a year close to when you plan to retire, like 2025, 2030, or 2040. The fund does the rest. It automatically shifts from stocks to bonds as you get older.

Let us look at the Fidelity Freedom 2025 Fund. Right now, it holds a mix of other Fidelity mutual funds that cover U.S. stocks, international stocks, bonds, and cash. Over time, that mix becomes more conservative. The fund recently showed a one-year return of about 14.7 percent and a three-year annualized return of 10.8 percent. Morningstar gives it four stars. Not bad for a set-it-and-forget-it option.

One thing people like about these Fidelity mutual funds is that you do not have to rebalance anything yourself. The fund managers handle all of that behind the scenes. You just keep adding money when you can.

Sustainable Investing Options

More investors these days care about where their money goes. They do not want to own tobacco companies or for-profit prisons. Fidelity mutual funds have responded by launching several sustainable funds.

The Fidelity Sustainable Target Date Retirement Fund is one example. It puts at least 80 percent of its money into companies that meet certain environmental, social, and governance standards. As of early 2026, this fund had about 24 percent in stocks, 71 percent in bonds, and 5 percent in cash. The bond portion yielded around 3.4 percent.

Another interesting one is the Fidelity Climate Action Fund. This fund focuses on companies that are doing well on climate metrics. It avoids things like thermal coal, controversial weapons, and tobacco. Performance has been strong, with a one-year return of nearly 29 percent and a three-year annualized return of 17.4 percent. Some of its top holdings include big names like Alphabet, NVIDIA, and Microsoft. So you are not sacrificing growth for your values with these Fidelity mutual funds.

Equity Income Funds for Regular Payouts

Not everyone is looking for growth. Some people need cash flow. That is where equity income funds come in. The Fidelity Equity-Income Fund aims to produce a yield that is higher than the S&P 500. It invests mostly in dividend-paying stocks, preferred shares, and sometimes convertible securities.

What is clever about this fund is that it also uses covered call options. Selling calls generates extra income, but it does cap how much the fund can gain if a stock shoots up overnight. It is a trade-off. For someone who wants a steady check every quarter, though, it can make sense.

When looking at Fidelity mutual funds like this one, pay attention to the share class. The Class A shares charge about 0.81 percent per year, while Class Z shares cost only 0.44 percent. The difference adds up over time. Portfolio turnover here is only 11 percent, which means the managers are not churning the portfolio constantly. That keeps transaction costs down.

Sector Funds That Focus on One Industry

Some of the best performing Fidelity mutual funds in recent years have been sector funds. The Fidelity Select Semiconductors Portfolio is a good example. With the boom in artificial intelligence and cloud computing, semiconductor stocks have gone through the roof. This fund returned 35 percent over the past year and an eye-popping 86.5 percent annualized over three years.

Gold has also had a strong run. The Fidelity Select Gold Portfolio returned nearly 20 percent over the past year and almost 98 percent annualized over three years. That is not a typo. Gold funds have benefited from geopolitical worries and concerns about the U.S. dollar.

Other sector options within Fidelity mutual funds include technology, biotechnology, and energy. These funds can be great when you are right about a trend, but they can also get crushed when the sector falls out of favor. They are not for the faint of heart.

Putting Together a Balanced Portfolio

Most people should not put all their money into a single sector fund. Diversification still matters, even if it sounds boring. Fidelity has a Global Balanced Portfolio that shows how to do this right. In 2025, that portfolio returned nearly 14 percent net of fees. It beat 99 percent of its peers over the three years ending in 2025.

How did they do it? The team looks at four things: sentiment, macro factors, valuations, and bottom-up fundamentals. Right now, the first three look a little shaky. But the last one, fundamentals, remains solid. Fidelity analysts keep finding that big tech companies have more earnings power than the market gives them credit for.

This portfolio also spreads its bets across different regions. It owns stocks in Europe, Asia, and emerging markets where prices are more reasonable. And it holds some commodities and alternative assets. So even if U.S. large caps stop leading the market, the portfolio has other engines of return.

The Changing Relationship Between Stocks and Bonds

For decades, stocks and bonds moved in opposite directions. When stocks fell, bonds usually rose. That made the classic 60/40 portfolio a reliable choice. But that relationship broke down recently. In 2022, both stocks and bonds fell together when inflation spiked and interest rates went up fast. That hurt a lot of people who thought they were being safe.

Fidelity mutual funds have adapted. The firms multi-asset team reduced a long-standing bet on the U.S. dollar. They moved some of that money into euros, yen, and gold. They also sold some direct holdings of U.S. Treasuries. But they kept their exposure to U.S. stocks through active managers they trust.

In addition, Fidelity has added alternative investments. On the liquid side, they use stock selection strategies that have low correlation to the overall market. On the illiquid side, they partnered with Brookfield to buy commercial real estate in Canada. These moves help protect portfolios when traditional relationships break down.

What Could Go Wrong

Nobody likes talking about losses, but you need to know the risks before buying Fidelity mutual funds. Market volatility is the most obvious risk. Stocks can drop 20, 30, or even 50 percent in a bad year. If you panic and sell at the bottom, you lock in those losses.

Interest rate risk matters for bond funds. When rates go up, bond prices go down. Funds with longer durations get hit harder. The target date funds in the Fidelity mutual funds lineup reduce this risk over time by shifting to shorter-term bonds as you approach retirement.

Foreign funds add currency risk. If you own a fund that holds Japanese stocks and the yen falls against the dollar, that hurts your return even if the stocks themselves do fine. The Fidelity Global ex U.S. Index Fund has this exposure built in.

Low quality bonds, sometimes called junk bonds, also appear in some Fidelity mutual funds. They pay higher yields, but they are more likely to default during a recession. You need to understand what you own.

Fees Matter More Than You Think

One of the best things about Fidelity mutual funds is that many of them are very cheap. The Fidelity 500 Index Fund costs just 0.01 percent. The U.S. Bond Index Fund costs 0.02 percent. At those levels, fees barely even show up on a statement.

Active funds cost more. The Fidelity Advisor Focused Stock I Fund has an expense ratio of 0.72 percent. The International Value I Fund charges 0.84 percent. Some people think active management is worth the extra cost. Others would rather keep the difference for themselves. There is no right answer, but you should know what you are paying.

Watch out for sales loads too. Some share classes charge up to 5.75 percent upfront. That comes right off the top of your investment. Other share classes have back-end loads if you sell too soon. If you are buying Fidelity mutual funds inside a 401k or an IRA, you can usually avoid these loads entirely.

Keeping an Eye on Performance

Fidelity gives you plenty of tools to track how your funds are doing. Their website shows one-day, one-month, one-year, three-year, five-year, and ten-year returns. You can also see Morningstar star ratings, which compare funds against their peers on a risk-adjusted basis.

The Climate Action Fund has four stars. The Freedom 2025 Fund also has four stars. But a four-star rating does not mean you should buy it without thinking. It just means the fund has done better than average in the past. Past performance does not guarantee future results. Every fund prospectus says that for a reason.

Rebalancing is something you need to do on your own unless you use a target date fund or a balanced fund. If you have a mix of different Fidelity mutual funds, some will grow faster than others. Over time, your portfolio can end up looking very different from what you intended. Selling some of what has done well and buying more of what has lagged is a disciplined way to stay on track.

Looking Beyond the United States

Not everything happens in the U.S. stock market. Fidelity mutual funds offer solid options for international exposure. The Global ex U.S. Index Fund covers developed and emerging markets outside America for just 0.05 percent per year. The International Value I Fund takes an active approach, looking for cheap stocks in places like Europe and Asia.

Fidelitys Canadian division has actually turned bullish on Canadian assets. After years of staying underweight, they have moved closer to a neutral position. Canadian economic data has been improving, with GDP rebounding and unemployment falling. Some of the Fidelity mutual funds focused on Canada have benefited from this shift.

Currency hedging is another factor to consider. Some funds hedge back to the U.S. dollar. Others do not. The Global Balanced Portfolio actually sold most of its dollar hedge early in 2025 and moved into euros, yen, and gold. That was a big change after more than a decade of favoring the dollar.

Derivatives and How They Are Used

Derivatives sound scary, but they play a useful role in some Fidelity mutual funds. The Equity-Income Fund writes covered call options. That generates extra cash, which helps boost the yield. But it also limits upside if the stock market goes vertical. That is the trade-off.

The Freedom funds use futures contracts to manage cash. Instead of having cash sitting on the sidelines earning nothing, they can use futures to stay fully invested. This also makes it easier to shift allocations without trading a hundred different stocks. Futures do add leverage, though, which can magnify losses.

The Global Balanced Portfolio has shorted some equity futures to keep its net market exposure in check. This allows them to hold onto skilled growth managers while not being too aggressive overall. It is a sophisticated way to separate stock picking from market timing.

Geopolitical Risks Are Real

You cannot ignore geopolitics these days. Conflicts in the Middle East, trade fights between the U.S. and China, and political turmoil in various regions all move markets. Fidelitys asset allocation team watches these developments closely. They focus on policy, not politics. What matters is how events affect the economy and corporate profits.

The firm has responded to rising geopolitical risks by buying more gold. That has worked out well given the performance of the Select Gold Portfolio. They have also reduced exposure to U.S. Treasuries. There are concerns about political interference with the Federal Reserve and other actions that could hurt confidence in the dollar. Whether those concerns are justified or not, they are influencing how Fidelity mutual funds are positioned.

Final Thoughts

Fidelity mutual funds give you a lot of options. You can go ultra cheap with index funds, pay a bit more for active management, or pick a target date fund and forget about it. You can focus on dividends, climate action, semiconductors, or gold. The choice is yours.

But no single fund family is perfect for everyone. You need to understand the fees, the risks, and how a fund fits into your overall plan. The performance numbers and portfolio details included here are accurate as of early 2026, but things change. Always check the latest prospectus before you buy. And remember that the best portfolio is the one you can stick with through the ups and downs.

Frequently Asked Questions

What is the minimum amount needed to start buying Fidelity mutual funds?

Most Fidelity mutual funds require an initial investment of 2,500 dollars. But there are exceptions. Many index funds and target date funds have no minimum at all. Retirement accounts often have lower minimums too. Check the prospectus for the specific fund you are interested in.

How do I decide which share class to buy?

Fidelity mutual funds often come in A, M, C, I, and Z classes. Class A has a front-end load but lower annual fees. Class C has no front-end load but higher annual fees and a back-end load if you sell within a year. Class I and Z are for big institutional investors or retirement plans. Your holding period and account type matter here. For most individual investors buying through a brokerage account, Class A or no-load shares make the most sense.

What is the difference between active and passive Fidelity mutual funds?

Active funds have managers who pick stocks trying to beat the market. They charge higher fees. Passive funds just track an index like the S&P 500. They charge very low fees. Over long periods, the majority of active funds fail to beat their passive counterparts after fees. But a small number of skilled managers do succeed consistently.

Are capital gains from Fidelity mutual funds taxable?

Yes, if you hold the fund in a taxable account. Fidelity mutual funds distribute realized capital gains every year, usually in December. You pay tax on those distributions even if you reinvest them automatically. Index funds and tax-managed funds tend to make smaller distributions because they trade less. Active funds with high turnover can generate surprise tax bills.

Can I actually lose money in Fidelity mutual funds?

Absolutely. Mutual funds are not bank accounts. They are not insured by the FDIC. The share price goes up and down every day based on what the underlying investments are worth. You can lose part or all of your money. Diversification across many Fidelity mutual funds reduces the risk of a total loss, but it does not eliminate the risk of a market downturn.

How often do Fidelity mutual funds reveal what they own?

Every quarter, Fidelity files a complete list of holdings with the SEC. You can usually find the latest list on the Fidelity website about 30 to 60 days after the quarter ends. The site also shows top holdings and sector exposures on a more frequent basis, sometimes daily.

How do target date funds from Fidelity work?

You pick a fund with a year close to your expected retirement date. The fund gradually reduces stock exposure and increases bond exposure as that date approaches. The Fidelity Freedom 2025 Fund, for example, will continue becoming more conservative for about 10 to 19 years after 2025. Then it settles into a final retirement allocation. You do not have to do anything. The fund handles it automatically.

What expenses should I actually pay attention to?

Look at the expense ratio first. That is the annual fee taken from your assets. Then check for sales loads, both front-end and back-end. Portfolio turnover matters too because higher turnover means higher transaction costs that do not show up in the expense ratio. If you are investing in a taxable account, tax efficiency matters as well. Frequent trading can generate unwanted capital gains distributions.