10 Best Fidelity Low Risk Funds for Retirement

Fidelity Low Risk Funds

With over 70 years of experience in managing investor’s money and over $2.1 trillion mutual funds assets under management, Fidelity plays a pivotal role in helping individuals access investment opportunities in domestic and international money market funds. Fidelity bonds are a great way of managing volatility as they will reduce risk in times such as a recession or during market panics.

What Is a Fidelity Bond?

Fidelity Investments commonly referred to as Fidelity is a financial services company based in Boston, Massachusetts. Fidelity is among the top global asset management companies in the world, known for its specialty in no-load actively managed mutual funds. They also offer Individual Retirement Accounts (IRAs), and 401(k) retirement plans. Fidelity funds cover all mutual fund asset classes, from domestic to specialized sectors.

3 Categories of Fidelity Funds

Fidelity offers a wide variety of high-quality mutual funds to invest in, and you can divide them into the following 3 categories to understand them easily.

They are: Best Balanced Funds, Best Index Funds, and Actively-Managed Funds.

1. Fidelity Actively-Managed Funds

These are funds that allow a portfolio manager the discretion to buy and sell investors stocks. This category of Fidelity Funds is actively managed to help in managing a relative index.  

2. Best Index Funds

This category includes the cheapest index funds that are available in the market. There are more than 30 index funds in this category among which the Fidelity 500 Index Fund (FXAIX) and is one of the best.

3. Balanced Funds

These are a type of Fidelity Funds that invest in a balance of cash, bonds, and stocks, hence the name “balanced”. Funds in this category are a smart investment option for investors looking to invest in only one fund or those who are looking for a solid investment as a foundation for their investing.

10 Best Fidelity Low-Risk Funds for Retirees

1. Fidelity OTC Portfolio (FOCPX)

Fidelity OTC Portfolio is a mutual fund that seeks capital appreciation. Investing in FOCPX involves putting over 80% of assets into securities that principally traded in the OTC (over the counter) or Nasdaq composite market. 

OTC markets have many small and medium-sized companies, a factor which indicates that these markets have an opportunity for growth. This explains why the returns from investments in FOCPX are relatively high. However, FOCPX also gets a low-risk investment rating of above-average because OTC markets have lesser regulation and transparency. 

While FOCPX is a high performer to investors, the fund is not as diversified compared to other index funds. The top 10 holdings in FOCPX amount to over 45% of the whole portfolio and 38% of the whole fund is in the technology sector. The fund is also relatively expensive at a 0.8% expense ratio, which can impact long-term returns.

2. Fidelity BlueChip Growth Fund (FBGRX)

Blue-chip companies with a high potential for growth are a hard find for investors. The Fidelity BlueChip Growth Fund (FBGRX) targets the large S&P 500 companies such as Dow Jones and others.

The management uses these criteria to offer only companies that indicate a growth potential that is above-average. FBGRX heavily inclines in information technology, which makes up 38% of the whole portfolio, and 25% of the portfolio is consumer discretionary. The expense ratio is also high standing at 0.8% and the ten-year average annual returns stand at 18.76%

3. Fidelity Nasdaq Composite Index Fund (FNCMX)

Unlike FOCPX that aims to beat the Nasdaq Composite Index, FNCMX is one of the best retirement funds that just aims to track the index performance. 

Although regarded as a pricey fund due to the 0.3% expense ratio, FNCMX is comparatively affordable for investors looking to invest in Nasdaq. Out of more than 3,000 stocks in the benchmark index, the fund holds 2,089 stocks.

Due to its passivity, the fund cannot take advantage of active bets through paring back sector exposure as FOCPX now does.

The fund is therefore 41% more inclined toward technology, with its top 10 holdings making up 45% of the portfolio. The FNCMX trades names such as Microsoft, Apple, Amazon, Facebook, and Alphabet.

4. Fidelity Contrafund (FCNTX)

FCNTX is a fund that invests in companies that are considered to be undervalued, compared to their growth or revenue prospects.

FCNTX is the largest fund under active management, which has suffered a drop in rankings from no. 95 to no. 209. Despite the drop in rank, and a score of 5.3 out of 10, the Morning Star still sees the value in this fund- hence its silver rating due to its effective approach and successful track record. The fund has a net expense ratio of 0.85% and 15.57% 10-year average annual returns.

5. Fidelity 500 Index Fund (FXAIX)

The FXAIX is offered in more than half of all Fidelity Fund’s 401(k) plans on the Fidelity platform. 

Being one of the best performing and lowest cost retirement funds on Fidelity, the 10-year average annual returns are 13.97%, with a net expense ratio of 0.015%. FXAIX is the lowest-cost mutual fund that tracks the S&P 500.

FXAIX has a gold badge from Morning Star and since it replicates the S&P 500, it’s a great option for index investors and investors looking for exposure.

6. Fidelity Total Market Index Fund (FSKAX)

The Fidelity Total Market Index Fund provides more exposure to the U.S stock market that is broader than S&P funds but for the same price.

FSKAX has nearly 3,500 holdings and goes far beyond the S&P 500 list. FSKAX limits companies on its holdings to those with more than $10 billion market value, making it a large-cap fund.

None of the FSKAX holdings make up more than 5% of the overall portfolio, which prevents overconcentration. 

The fund is a great option for exposure to a broad stock market, and at index fund pricing. The 10-year average annual returns are 13.68% and the net expense ratio is 0.015%. 

7. Fidelity Worldwide Fund (FWWFX)

FWWFX is the best performing Fidelity fund that goes beyond the US. However, 60% of its portfolio is US companies — meaning that FWWFX is not one of the most exposed worldwide funds.

FWWFX gives you exposure to more than 11 countries and does well in keeping the stock weight below 5%. With a 10-year average annual return of 12.% and a 0.99% net expense ratio, FWWFX is quite on the pricey edge for an index fund. Still, its cost is below the category average and the performance is above average.

8. Fidelity Extended Market Index Fund (FSMAX)

FSMAX is a popular fund in the Fidelity 401(k) plans that provide small-cap and medium-cap exposure, which is in low supply among other top-performing Fidelity funds.

FSMAX is benchmarked to the Dow Jones U.S Completion Total Market Index, and this excludes the S&P 500. This makes SFMAX a complementary investment to S&P500 and other large-cap index funds.

It’s highly diversified with over 3,100 holdings, with the top 10 holdings accounting for only 7% of the portfolio. The fund is also attractive to investors as its net expense ratio has dropped from 0.045% to 0.035%.

The ten-year average annual returns are 12.32% and are considered as an above-average in the U.S mid-cap blend category.

9. Fidelity Puritan Fund (FPURX)

As one of the oldest funds in the market, the FPURX is a relaxed approach to retirement investing. FPURX, which was founded in 1947, invests 40% of its portfolio in debt investments and other fixed-income securities such as bonds. These investments mainly include mortgage pass-through securities and investment-grade credit.

Owing to the relaxed and conservative investment, the returns are also conservative at around 10% ten-year average annual returns. The net expense ratio stands at 0.53% with an above-average risk that falls under the Morning Star’s 50%-70% equity category on allocation.

10. Fidelity Zero Expense Ratio Index Funds

The Fidelity Zero Expense Ratio Index Funds are a line up of zero minimum, zero expense index mutual funds.

They include the Fidelity Zero International Index Funds (FZILX), Fidelity Zero Total Market Index Fund (FZROX), Fidelity Zero Extended Market Index (FZIPX), and the Fidelity Zero Large Cap Index Fund (FNILX).

These are nascent funds debuted in 2018 by Fidelity, and they don’t have a performance track record like other funds included in this list. While they may take a while to be included in the 401(k) plans, they are a great retirement investment option as they have no investment minimum or expense ratio to worry about.

Check out here for the Best Fidelity International Funds

Things You Need to Consider Before Buying Fidelity Bonds

1. Have a well-thought-out investing and trading plan

The best way to start investing in Fidelity bonds is by having a long term plan on how you will invest. For a comprehensive investing plan, here are some of the things you should consider:

  • Investing objectives
  • Ability to tolerate risk
  • Time horizons
  • Taxes

These four factors will help you find the types of assets to acquire on your portfolio and the strategy you will employ to accomplish your investment goals. Ensure that your planning also features other unique circumstances that apply to your investing needs. Professional and financial assistance at this stage is important and necessary.

Consider if you want active trading, and how much of your portfolio will you be trading. Professionals advise against the active trading of most of the stocks. However, ensure that you first build a portfolio that is diversified, and which aligns with your risk constraints and investing objectives.

Portfolio diversity means having an asset mix in bonds, stocks, and other investments. Diversification helps in managing your risk.

2. Research Your Ideas Fully and Employ Trading Best Practices

Researching your ideas is important especially if you plan on actively trading part of your portfolio. Here are some of the things to consider when doing your research:

  • Finding new ideas– there are plenty of ways to come up with investing ideas. One of the best places to start is with what you already know. Then you can use the knowledge you have to identify the stocks that you can analyze and study to consider if you want to own them.
  • Start with the basics– the basic factors of an investment opportunity often give a clue as to the performance of the investment over a period. For example, earnings are a basic indicator of how a stock has and will perform over time. Even with short term fluctuations, how the stocks perform will depend on the company’s ability to generate earnings.
  • Understand the technical aspects– Fundamental analysis is helpful in directing whether you buy or sell. Technical analysis shows you “why” you need to buy or sell, and at what price. Technical analysis includes using data to create charts that help you in spotting trends and patterns that will help you with your decision. 

3. Plan for a trade

After doing your basic research, fundamental analysis, and identifying an opportunity, the next step will be choosing a strategy.

Whether it’s selling or buying mutual funds, stocks, bonds, ETFs, or considering advanced buying and selling options, a strategy is necessary.

Back screeners and backtesting software will help you find flaws and you can use this to have an idea of the risks that will come with a particular trading strategy or idea. Testing both short term and long term strategies may also be necessary.

Just as there are risks involved in every investment opportunity, all trading strategies have a risk that you should know beforehand.

Entry and exit trading strategies are an important tool in succeeding in all your trades. An entry strategy, for example, can help you handle volatility in case things change in between the time you decide to trade.

An exit strategy can also help you make the right move. Emotions can stand in the way of information-driven, dispassionate decisions. Have a plan for when things go right, and when things go wrong. Know your time horizons and your risk tolerance threshold.

4. Placing a trade

After doing your research and choosing a strategy for your investment option, the next step is to execute the trade. 

At this stage, be sure to look for a broker that has the trading capabilities that you need, they use the best execution and offer a trading platform that you are happy using. 

When making a trade, consider the type of order that you want to use, and use the bid-ask report, commissions, and fund fees to manage the overall trading costs. Be aware of the various trading characteristics that come with each of the investment options you go for.

Fidelity’s ETF services recommend the following 3 best practices; noting the bid-ask spreads, using limit orders, and avoiding trading near the market opens and closes.

5. Monitor your positions and adjust them as needed

Fidelity recommends that you check your portfolio mix at least once a year, or in times when your financial circumstances change significantly. For short-term trades, monitor your positions more closely, with regards to your time horizons. There is a wide range of monitoring options online and through mobile apps and alerts. Monitoring your investments should be part of your plan.

Here are some things to consider when monitoring your positions:

  • Risk and return- Plan for each trade before you make it. The plan should include your required return for holding the investment. Ensure that you know what you own by researching thoroughly. Also, ensure that you monitor how well an investment is aligned with your objectives. Set alerts on factors such as news or analyst rating changes that could affect your investment. 
  • Portfolio impact- it’s also important for you to assess how a single trade can affect your overall objectives. If you have a desired asset allocation, ensure that you understand how any trading decision will affect your whole portfolio. Make use of online monitoring of your portfolio to help in evaluating your investments.
  • Tax situation- With time, the value of your investments change and so do the tax implications. One of the most important tax consequences that investors should know about is the short-term capital gains, that attract higher tax compared to long-term capital gains. There are also strategies to harvest tax, which involves managing your portfolio by offsetting your gains with losses.

Is Buying Fidelity Bonds Right For You?

Fidelity bonds are a great strategy to help you in balancing your portfolio and reducing risks through acquiring equities in your asset mix. Fixed-income assets help in ensuring that your portfolio generates income, and also lowers volatility. Mutual funds also come in handy to enhance portfolio diversification and lower the investor’s risks.

The only downside to buying Fidelity bonds are the risks related to interest, credit, and principal. Bond prices decline when interest rates rise and a drop in interest rates results in an increase in the bond price. In addition, bonds are rated by a third party agency which determines the creditworthiness of an issuer. The credit risk for funds that invest in below-investment-grade quality bonds tends to be higher.

Related: Best Fidelity Stable Value Fund


Fidelity bonds are an efficient investing strategy compared to other strategies such as buying individual securities. Bonds funds invest in many types of securities and they allow for the buying and selling, depending on the conditions of the market. 

Fidelity bonds can help you in diversifying your portfolio as you can own individual bonds with varying maturities. Fidelity bonds are also managed professionally by analysts who have the experience and technology needed to research and make profitable investment decisions. Their liquidity allows you to trade the shares each day, and you have the convenience of reinvesting your dividends or make an addition to your investments any time.

The Investoralist is here to help you make the right investment decisions by providing up-to-date information on investment trends that will help you make smart investment decisions. Visit the site to learn more.

Schwab Total Stock Market ETF: low-cost fund with no investment minimum

schwab total stock market etf

Charles Schwab Corporation is one of the top financial institutions in the US. It has over 45 years of experience in investment services for clients. Its ETF funds are notable for low costs and zero minimum requirements. You could miss more of the benefits if you plan to invest in ETFs and look another way than the fund Schwab total stock market ETF.

Total Stock Market Index Fund(SWTSX)

Charles Schwab Total Market Index Fund(SWTSX) is an exchange-traded fund that tracks the entire US stock market’s total return. It invests according to the Dow Jones US stock market index.

The Dow Jones US Stock Market Index

Also called the US Dow Jones Index, it is a market capitalization-weighted index. The stocks with the largest market value measure up the most proportions of the index. It covers 95% of the US stock market and calculates the total return of the stocks covered with reinvestments of dividends and interests.

Currently, it tracks 3,778 stocks in the US market as of December 31, 2020. They are the most liquid stocks traded on the exchanges. Foreign companies and exchange-traded funds are not inclusive. The index provides a useful indicator of US market trends and company performances. 

Details of Schwab Total Stock Market ETF

  • Type: US stock market ETF
  • Symbol: SWTSX
  • Low Net Expense Ratio: 0.03%
  • Investment Objective: The fund’s goal is to track the entire US stock market’s return, as measured by the Dow Jones US Total Market Index.
  • Highlights: a. A straightforward, low-cost fund with no minimum investment. b. The fund can serve as part of the core of a diversified portfolio. c. Simple access to the entire US market in one fund. d. The index is designed to provide a comprehensive measure of large-cap, mid-cap, and small-cap US equity securities.
  • Assets Under Management: US13.7billion as of December 31, 2020.
  • Return for Dec 31, 2020: 20.71%
  • One-year Turnover rate: 3.79% It is the cost of change of portfolio holdings in a year. The higher the percentage, the higher fees the fund incurs! 
  • Minimum Initial Investment: None

Schwab Total Market Index Fund

1. Low-cost fund without minimum 

Whether you are newbies or experienced investors, the fund is a fit for all as there is no minimum investment requirement and the expense ratio is only 0.03% low.

2. Diversification

If you plan to hedge your portfolios against risks, the fund is a protection against other risky assets in your investment planning.

3. Simple access to the US market

It is one click to the whole US market and almost all sectors and large-cap, mid-cap, and small-cap companies.

4. Sectors invested

The fund covers major industries all across the US. As of December 31,2020, among them are information technology(27.10%), healthcare(13.90%), customary discretionary(12.40%), financials(10.90%), commercial services(9.90%), industrials(9.20%). They consist of more than 40% of the total portfolio of the fund.

5. Enterprises invested

It invests mainly in primary blue-chip enterprises. The major companies include Apple Inc., Microsoft Corporation, Amazon.com.inc., Facebook class A, Tesla Inc., Alphabet Inc. class A & C, Berkshire Hathaway class B, Johnson & Johnson, JP Morgan Chase & Co. They take up more than 20 percent of the total portfolio.

6. Firearm holdings

A point you should note is Charles Schwab has a transparent policy regarding investing policy. It will disclose some securities that may cause harm to society. The Schwab Total Stock Market ETF reveals only a 0.03% stake of the fund in firearms companies as of March 31, 2020. It offers conscious investors their open and transparent approach to investing.

About Charles Schwab Corporation

The Charles Schwab Corporation is a member of Standard & Poor’s 500 Index with more than US100 billion market value. Its business scope covers investing, banking, and consulting services. Charles Schwab has assets under management for over US500 billion as of June 30, 2020, since it first set up the mutual fund and ETF business. 

Objective: Charles Schwab helps investors better manage their mutual funds and reduce the costs of buying mutual funds by setting up the Schwab Mutual Fund OneSource@ and making investing easier and low-cost. Furthermore, Charles Schwab makes Exchange-Traded funds(ETF) accessible to all by investing in all market ETFs commission-free. That makes investors save more in return to earn more. Schwab total stock market fund series, including ETFs, nowadays have become popular among investors.

Management style: ETFs are passively managed funds based against a stock market index like Standard & Poor’s 500(S & P 500) or Dow Jones Industrial Average(DJIA). It saves investors time to pick stocks and manage their portfolios by mimicking the stocks of market indexes. Charles Schwab goes a further step; it offers Schwab Intelligent Portfoliotm service, an online investment advisory service assisting the management of their portfolios. The fascinating thing is it is free for its clients.

Commission: Of course, we know the trend is for zero-commission; Charles Schwab also offers commission-free for stocks, ETFs, and options trades. Moreover, it uses an order strategy called the Schwab Order Execution Advantagetm to improve clients’ order quality. Through their unique system, clients get better price quotes and faster execution speed.

Robo-advising service: The company offers Schwab Intelligent Portfoliostm, to help manage clients’ portfolios by building, monitoring, and rebalancing assets automatically. The fantastic thing is it is free from advisory fees, account service fees, and commission. You should discuss this with your consultant. 

Useful investment tool: What makes Charles Schwab outstanding is its research. Besides their professional research on equities, bonds, and funds, they have rate stocks and mutual funds based on their rating system. Charles Schwab offers a useful investment tool called “Screen List” reviewed by experts and released quarterly. The tool lets you pre-screen the ETFs and mutual funds well picked by professionals according to categories like big-cap, mid-cap companies.

Apart from that, you can get quotes and fund prices and market updates, and even create watch lists from Google Assistant and Amazon’s Alexa!

To Sum Up

The Schwab Total Stock Market ETF offers many benefits to all walks of investors with its low-cost expenses, no minimum investment requirements. You can access a wide span of industrial sectors and invest in major corporations in the US economy with this fund. It plays a safe bet against risks within your portfolio. Investors are accessible to Charles’s transparent approach to investing.

Finally, you should cross-examine more analysis and information before making a judgment. Besides talking to your financial advisor, you should seek more knowledge from sources like investoralist. An online magazine provides valuable investing information you should not miss; subscribe now to receive updates! 

Bond-rating Scale: What Is It, and How Does It Work?

Bond Rating Scale

Bond-rating helps investors assess a bond issuer’s financial strength to repay the debt on time. Bond-rating agencies set up rating scales to evaluate bond issuers’ creditworthiness. Understanding the credit ratings is essential to bond investors, whether institutional or individual investors, help in investment decisions.

This article will discuss what bond rating is; how bonds are rated; then, we will elaborate on the current leading 3 rating agencies and their rating systems. Finally, we also mention the implications of different bond ratings, outstanding bond ratings, and BBB ratings.

Essentials of Bond Ratings

What is a bond rating?

A bond rating is to evaluate a commercial corporation’s or a government agency’s creditworthiness. Contrary to an individual’s credit score, the rating agencies publish the institutions’ rating scores. Investors make investment decisions based on the financial strength and their probability of repaying the debt.

  • A bond rating process involves three major parties. 1.A bond issuer plans to raise the money. 2. A rating agency assesses the bond issuer’s default risk and cash flow risk. 3. Bond investors buy the bonds and loan the money.
  • There are two types of bond issuers: 1. Government agencies, e.g., local governments, central banks and treasury departments, etc. 2. Private Institutions, e.g., public-listed companies. They need additional capital for operating and cash flow needs. Enterprises need financing or refinancing for their projects.
  • Rating agencies: Three primary agencies occupy more than 95 percent of the credit rating market. They are Standard & Poor’s, Moody’s, and Fitch. They are all paid agencies to assess bond issuer’s credit quality.
  • Bond investors consist of 1. Institutional ones: they are bond funds, insurance companies, banks, sovereign wealth funds and corporations, and retirement funds, etc. They invest in bonds to maintain a regular and steady income for fund owners. 2.) Individual bond investors: they invest in bonds for personal wealth and income accumulation.

What factors affect bond ratings

Internal factors

  1. Creditworthiness: Like a credit bureau, a credit agency evaluates a corporation’s ability to pay back the debt. If an institution is not likely to pay back principals and interests on time, it may have a higher default risk like Finnie Mae and Freddie Mae during the financial crisis in 2008. A corporation may have difficulty in cash flow payments due to deteriorating business situations.
  2. Capital structure: A bond issuer may have complicated capital systems, and it can cause a company to repay even if it has healthy business growth. So a company can set up orders and priorities to pay back creditor’s loans. As a result, investors of lower priorities may have a higher default risk of principal or interest payments or both!
  3. A bond issuer’s competitiveness: If a corporation has edges in business competitions and the capability to increase profit among competitors, it can make bondholders more assured of its ability to pay back principal and interest.
  4. Financial health: A company’s financial position reflects its financial strength and commitment. Of these is a company’s balance sheets, which provide more financial information for investors.

External factors

  1. Microeconomic: Changes in industry and government regulations may have an impact on a company’s competitiveness. For example, more and more consumers are using more online shopping. As a consequence, online companies find bond issues easier than mall operating companies.
  2. Unpredictable events in the future: Unexpected events like earthquakes, pandemics, and floods cause unforeseen damages in principal and interest payments. It is beyond a corporation’s financial commitments.
  3. Third-party risks: Rating agencies consider third-party’s ability to guarantee bond issuer payments. The financially stronger the guarantor, the more secure the commitments become. 

How are bonds rated?

A bond rating is a grade assigned to a bond. The rating defines the borrowing corporation’s financial strength and willingness to repay the debt.

Generally, most bonds are rated by the three rating agencies: Standard & Poor’s, Moody’s & Fitch. They all have their rating systems in place. However, they have clear definitions for grading bonds. 

In terms of investment grades, bonds are all classified into three types:

  1. Investment-grade;
  2. Non-investment grade;
  3. Not-rated. 

According to the US Securities and Exchange Commission, investment-grade bonds have a lower risk of default and a higher likelihood of paying on time, so they have a higher rating. However, non-investment grade bonds, also called high-yield or speculative bonds, are the reverse, so they pay a higher interest. Not-rated bonds are bonds not rated by agencies; they are more likely to default than speculative bonds.

Besides, bond ratings range from the highest quality to the default class. The latter pays the highest rate of interest, with the former the least.

The three rating agencies

1. S&P Global Bond Ratings: it is one of three rating agencies recognized by the Securities and Commission and the oldest. It rates numerous government and corporate bonds and structured finance entities and securities. One of its main jobs is to assess a bond’s default risk. The following table lists the features of their grading system:

InvestmentExtremely strong capacity to meet financial obligations.AAA
InvestmentVery strong capacity to meet financial obligations.AA
InvestmentStrong capacity to meet financial obligations, but somewhat susceptible to adverse economic conditions and changes in circumstances.A
InvestmentAdequate capacity to meet financial commitments, but more subject to adverse economic conditions.BBB
SpeculativeLess vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.BB
SpeculativeMore vulnerable to adverse business, financial, and economic conditions but currently has the capacity to meet financial commitments.B
SpeculativeCurrently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments.CCC
SpeculativeHighly vulnerable; default has not yet occurred but is expected to be a virtual certainty.CC
SpeculativeCurrently highly vulnerable to non-payment, and ultimate recovery is expected to be lower than that of higher-rated obligations.C
SpeculativePayment on a financial commitment or breach of an imputed promise; also used when a bankruptcy petition has been filed, or similar action is taken.D
N/AThe security was not rated.

2. Moody’s Investors Service Bond Ratings: It deals with evaluating projected loss in case of default. The rating services cover financial, non-financial institutions; sovereignty; structured financial transactions, infrastructure, and project financing.

InvestmentObligations of the highest quality, with minimal risk.Aaa
InvestmentObligations of high quality, with very low credit risk.Aa(1,2,3)
InvestmentObligations of upper-medium-grade, with low credit risk.A(1,2,3)
InvestmentObligations of moderate credit risk that may possess speculative characteristics.Baa(1,2,3)
SpeculativeObligations with speculative elements that are subject to substantial credit risk.Ba(1,2,3)
SpeculativeObligations are considered speculative that are subject to high credit risk.B(1,2,3)
SpeculativeObligations of poor standing and are subject to very high credit risk.Caa(1,2,3)
SpeculativeHighly speculative obligations that are likely in, or very near, default, with some prospect of recovery in principal and interest.Ca
SpeculativeLowest-rate class of obligations that are typically in default, with little prospect of recovery of principal and interest.C
#the numbers in the bracket indicate the obligations to pay from 1-strongest, 2-stronger, 3-strong.

3. Fitch Ratings: It is the smallest of the three. Like S&P’s, it rates the probability of default. It also covers sovereigns, financial institutions, corporate finance, Islamic finance, structure finance, and global infrastructure.

InvestmentExtremely strong capacity to meet financial obligations.AAA
InvestmentVery strong capacity to meet financial obligations.AA
InvestmentStrong capacity to meet financial obligations, but somewhat susceptible to adverse economic conditions and changes in circumstances.A
InvestmentAdequate capacity to meet financial commitments, but more subject to adverse economic conditions.BBB
SpeculativeLess vulnerable in the near-term but faces significant ongoing uncertainties to adverse business, financial and economic conditions.BB
SpeculativeMore vulnerable to adverse business, financial, and economic conditions but currently has the capacity to meet financial commitments.B
SpeculativeCurrently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments.CCC
SpeculativeHighly vulnerable; default has not yet occurred but is expected to be a virtual certainty.CC
SpeculativeCurrently highly vulnerable to non-payment, and ultimate recovery is expected to be lower than that of higher-rated obligations.C
SpeculativePayment on a financial commitment or breach of an imputed promise; also used when a bankruptcy petition has been filed, or similar action is taken.D
SpeculativeThe security was not rated.NR

Investment-grade vs. Junk Bonds

Bond-rating agencies assess bonds per bond quality and stability. Besides, the rating process involves expectations and outlook. These factors undoubtedly influence an investor’s attitude towards bond investment. 

Investment-grade bonds are rated quality-grade as they provide stable cash flows and are viewed as safe investments. However, the rates of interest are relatively low. They range from “AAA” with the most robust financial strength to “BBB” grading with the least.

Bond not belonging to the bonds as mentioned above are non-investment grades or “not-rated.” They are high-yield or junk bonds with attractive rates of interest. Investors interested in these bond investments should beware of bond issuers’ financial aspects and business circumstance changes.

Generally, junk bonds are divided into two major categories:

  • Fallen Angels: The bond issuer’s rating has lowered from “investment” grade to “non-investment or junk” status.
  • Rising Stars: The status of “non-investment” is promoted to “investment” or higher “non-investment” grades.


If you intend to invest in bonds, you should use a bond rating scale provided by a rating agency to assess your potential bond issuer and bond’s quality. More than that, you should look beyond the rate of interest as a bond’s viability is determined by multiple factors. 

An investor should note the implications of “investment” and “speculative” or not-rated graded bonds. The three rating agencies provide reliable information needed to assist investors in doing the jobs. 

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How To Invest In Vanguard Mutual Funds

vanguard mutual funds

You may not know Vanguard is one of the largest asset management companies in the world. It now has about US6.2 trillion under management as of January 31. 2020. However, you must know more and more people invest in Vanguard for personal and institutional planning like retirement, education or wealth accumulation, and other goal-setting planning.

More and more investors pick Vanguard mutual funds as their tools for financial aims because it offers a series of benefits in investment returns and choices. You may be overwhelmed by its variety of funds. In the following, I will tell you how to invest in their funds!

Vanguard Mutual Funds: An overview

You must be overwhelmed by its 425 traditional funds. Vanguarduard has a long history of investing experience dating back to 1929. Of these, ETFs are members of the mutual fund family. The management styles and returns are similar for both types of funds; nevertheless, investors should note their differences. Let’s take a look at them:

  • Vanguard funds generally have lower-cost structures in their products; ETFs are suitable for tax-concerned investors. As a result of their nature, ETFs tend to be tax-friendly for high-income investors.
  • Mutual funds have only one price at the end of a trading day, while, like stocks, ETFs can be traded all of a day. That means, like stocks, there are multiple prices available to investors during business hours.
  • ETFs have lower cost-expense ratios than mutual funds. Mutual funds tend to have higher management costs and trading activities. 
  • Mutual funds require higher minimum investments than ETFs.
  • Finally, mutual funds are fit for investors active in fund allocations, but ETFs are suitable for people to hold long-term and make low-cost regular investments.

What are Vanguard Mutual Funds?

As you are aware, mutual funds hold a large number of securities in their portfolios. When you buy a stake in a mutual fund, you own a part of the securities. Moreover, Vanguard offers three significant shares to investors: Institutional Shares, Admiral Shares, and Investor Shares.

Expense ratios and minimum investment amount are the principal factors in the classes of shares. Institutional shares have the least expense ratios but the highest investment amounts, while Investor shares have the highest expense ratios and lowest minimum required investment amounts. Admiral shares are in the middle.

Vanguard increases redemption fees for its funds to discourage short-term speculations but doesn’t charge front-end and back-end commissions. Investors should benefit from the fee structures if they have long-term financial goals. However, investors should note many Vanguard ETFs are available on stock brokerages, so they need to pay commissions for ETF investment products.

The benefits are twofold: Funds own the company; therefore, Vanguard’s profit goes back to fund investors because they are the shareholders. That means if you invest in Vanguard funds, you are technically an owner of the company, and you will benefit from the invested fund’s share of Vanguard’s profits.

How does Vanguard Mutual Funds Work?

Unlike other fund houses, Vanguard isn’t owned by a group of outsiders. What is unique for Vanguard is the fund investors own the company. What does it mean? No other interest except for fund investors’ is the primary focus! 

No matter the funds: mutual funds, ETFs, Vanguard 500 index funds, or select funds, they serve only one: fund investors. In other words, Vanguard managers will use investment strategies for the benefits of the same boss: fund investors and Vanguard. Apart from the fund investment service, they also offer financial consulting and other professional services, and they count towards the company’s profits! Don’t you see it is a unique company!

Types of Vanguard Asset Classes

Vanguard runs a wide array of mutual funds domestically and internationally. Investors can choose asset classes from large-to-small caps, bond funds, domestic asset classes, and international ones, even from developed to emerging markets. Vanguard uses the following asset class to invest:

  • Money market funds: Short-term investments like certificates of deposits, bank deposits are issued by the US federal government, state and local governments, and banks. They are the most liquid investments but offer the lowest returns.
  • Bonds funds: Blue-chip companies issue investment-grade bonds. They offer steady income streams, and the yield is higher than the money market funds. The bonds can be a supplement to some high-risk investments for stable investments.
  • Stock funds: By Investing domestically and overseas, stocks are the highest risk investments. They offer the opportunity for optimal capital gains. The investing scope covers all across industries, companies of all sizes, stages, and all markets. 
  • Target date funds: It is a mix of stocks, bonds, and other securities. The portfolio combination may change according to personality and real-life situations. Some combinations may change from reducing stock holdings to increase bond holdings. Vanguard offers different percentage combinations of target-date funds to cater to investors of different stages in life. I suggest you should consult a financial advisor or investment professional before you make an investing decision.  

What sets Vanguard Mutual Funds Apart?

  • Low expense ratios: Contrary to traditional fund houses, Vanguard is owned by mutual fund investors. That said, investors owned the company. That may explain why the low cost and expense ratios are unique characteristics of Vanguard.
    Don’t ignore this: If you use the compound effect to calculate the cost savings, the savings can be substantial. I want to tell you the truth: in 2019, the average expense ratio for Vanguard mutual funds is 0.1%, while the average ratio for other mutual funds is 0.57% – a difference of 82% in costs!
  • Focus on the long-term: Vanguard management pledges value and long-term investing as principal approaches to investment strategies. According to official website, by December 31, 2020, their funds’ performances outrank their peers by 70%; 78%; 81% over three, five, ten years, respectively! What fantastic achievements!
    Long-term vision and value-based strategies are what make successes in performance. Management implements the approaches to fund investing and advising businesses in dealing with clients or portfolio buildups.

How to Buy Vanguard Mutual Funds

1. Open an account with Vanguard.

It takes a short time to open a brokerage account with Vanguard online. You must choose what type of account to invest in. There are ordinary taxable investment accounts, 401(K), individual retirement accounts, or 529 college savings accounts. By linking your bank account or another investment account for roll-over with your Vanguard account, you can immediately buy fund shares.

2. Buy Vanguard Mutual Funds in your Retirement Plans

Once you have an account with Vanguard, you can trade their fund shares online. Let me remind you: your goals should be compatible with the fund house. When your account is a retirement plan, you should adopt a buy-and-hold approach to maximize the advantages offered by Vanguard. Even if it is a taxable investment account, I suggest you use a mid-to long term strategy. Consulting a financial advisor is the first step to investing.

3. Open an Online Brokerage Account

Technology brings us convenience. You can now open an individual online brokerage account without going to brick and mortar store. You can buy or sell stocks, bonds, mutual funds, and exchange-traded funds online. However, this type of account is taxable. It means all the capital gains and dividends, and bond interests are taxable to the government. Finally, brokerage like TD Ameritrade, Fidelity, Charles Schwab, and E*Trade may charge against some trades; however, the current trend is zero commission. Do some investigations before making any decision!

Best Vanguard Funds to Buy and Hold

You intend to invest in Vanguard, take a look at the following five funds seriously:

1. Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)

The fund is a candidate for the sake of the portfolio buildup process. It covers stocks and bonds domestically and internationally. The benchmark index is CRSP US Total Market Index. It has access to blue-chip tech companies, like Amazon, Apple. The expense ratio is 0.14%, and the turnover rate is 4%. However, the past 10-yearly return is 13.60%.

2. Vanguard Dividend Growth Fund (VDIGX)

It provides a steady income stream to fund investors. By investing in companies with significant dividend growth, it has a trailing 13.15% return over the past ten years. The investees are all quality stocks like Coca-Cola. The expense ratio is 0.27%

3. Vanguard 500 Index Fund Admiral Shares (VFIAX)

Another excellent fund for a buy-and-hold strategy like Vanguard’s total stock market index fund investor shares(VTSMX) focuses on growth. Surprisingly, the expense ratio is just 0.04%. However, it has a trailing 10-year average return of 13.95%. It is a top performer for Vanguard!

4. Vanguard Total International Stock ETF (VXUS)

As the name implies, the index fund invests in international stock markets. Big names like Nestle and Alibaba are members of its portfolio. It tracks the FTSE Global All Cap ex US Index benchmark with an expense ratio of 0.08%. A fund fits for tax-efficient or long-term investors as well.

5. Vanguard US Growth Fund Admiral Shares (VWUAX)

This fund is growth-oriented and capitalizes on large-cap companies like Apple, Netflix. Capital appreciation is its primary growth objective. You will be impressed with the low expense ratio of 0.28%. But the past 10-year return is 17.88% so far!

Check out here for the 10 Best Vanguard Funds for 2021

To Sum Up

To invest in Vanguard mutual funds, you have three ways to do so:

  1. The most convenient is to open a retirement account with Vanguard on their website;
  2. You should begin investing in their mutual funds in your account and save for the future;
  3. You may choose to open a taxable account with major brokerages like TD Ameritrade, Fidelity.

You should keep in mind investing involves multiple risks, including the possible loss. I suggest you talk to investment professionals to understand your risk profiles and make some tests before making final decisions. Information gathering is essential before investing in your financial life, and you should look for trustworthy resources like investoralist. It provides a lot of professional analysis regarding financial planning and investing tips that save you time planning and investing. 

For your future, subscribe to Investoralist today! Happy investing!

You may not know Vanguard is one of the largest asset management companies in the world. It now has about US6.2 trillion under management as of January 31. 2020. However, you must know more and more people invest in Vanguard for personal and institutional planning like retirement, education or wealth accumulation, and other goal-setting planning.

More and more investors pick Vanguard mutual funds as their tools for financial aims because it offers a series of benefits in investment returns and choices. You may be overwhelmed by its variety of funds. In the following, I will tell you how to invest in their funds!

Top 4 Best Fidelity Funds for International Investing

Top 4 best fidelity international funds

What are International Funds

International funds are mutual funds that allow for investing in companies from anywhere in the world except an investor’s country of residence. Also referred to as foreign funds, international funds are different from global funds.

Global funds invest in companies from any country globally, including the country of residence.

In summary, the top 4 best fidelity funds include:

  1. Fidelity international index fund
  2. Fidelity emerging markets index funds
  3. Fidelity total international index fund
  4. Fidelity zero international index fund

International funds allow investors to potentially own shares from multiple foreign companies and are a lucrative way of attracting higher returns from a diverse class of assets. With international funds, you can target frontier, developing, and mature market investments.

These international funds also target specific markets that have a potential for growth. These markets range from government and corporate bonds to niche growth sectors. As a result of rapid growth in emerging markets, international funds have been a lucrative investment for the last two decades. They have also helped in hedging investors against the fall in the value of the dollar.

Advantages and Risks of Investing in an International Fund

1. Diversification

International funds typically involve the owning of multiple individual stocks across different industries, and in multiple countries. Through international funds, investors are therefore able to access multiple diversification cushions which include: industrial sector, currency, and geographical diversity.

The diversification helps to protect the entire portfolio from factors such as poor performance of a particular stock or regional political instability.

2. Professional Management

International funds are managed by professional portfolio managers and analysts who have the expertise needed to research and analyze market information and companies. They are therefore a lucrative investment for small investors who would not typically have access to the expertise,  global reach, and technology needed to access to invest internationally.

3. Capital Appreciation and Income

With access to emerging and frontier markets, International funds can potentially offer better capital appreciation compared to domestic funds. They also expose an investor to a broad category of income sources, compared to investing in US stocks only. However, the high potential for capital appreciation also attracts high risk due to instability in these markets.

4. Convenience and Liquidity

International funds investments allow you to automatically reinvest your income from capital gain distributions and dividends. You can also increase your investments at any time and buy or sell your fund shares at the net asset value of the day’s closing.

Risks Involved In International Stock Funds

Similar to other investments, international funds carry risks; most of which are specific to international markets. These risks include currency risks, and risks to changes in the economic, political, and regulatory conditions.

These risks are often amplified in developing countries, whose economies and markets are under lesser regulations. The investments in these countries are therefore prone to volatility.

1. Economic Risk

This risk arises from the economic conditions of a country. In a country whose economy is weak, It’s likely that the investing environment is unreliable, compared to a country with a stronger economy.

2. Political Risk

The political climate of a country can influence the economy, and investors are exposed to losses in case of political instability. Often,  this risk is used as an indicator of the ability of a country to create an enabling environment for outside investments. Even in a country where the economic risk is low, an unfriendly political environment is unfavorable to international investments.

3. Currency Exchange 

The exchange rate of a country’s currency against the US dollar poses a risk to international investments. Wide fluctuations in the exchange rate impact the Dollar value attached to an investment, in spite of a constant security price.

However, currency fluctuations can also favor an investor when the returns on stocks increase as a result of a decline in dollar value, compared to other currencies.

4. Less Information

When investing in international funds, financial analysts may not have a wide knowledge-base concerning international markets and stocks. This poses a great risk to investing in international funds as the buying decision may be based on incomplete information.

5. Reduced Liquidity

Some markets have a lower frequency in trading securities. This is a risk to international funds as the buying and selling of some securities is difficult. This can have an unpredictable effect on the losses or profit made if you are forced to liquidate your stocks.

Brief Background of Fidelity Investments

Fidelity Investments is an American multinational corporation that was started in 1946 as a mutual fund company.

Fidelity is one of the largest asset managing corporations in the world, with a combined total customer asset value of over $8.8 Trillion and managing assets of over $3.3 Trillion as of June 2020.

Fidelity offers a wide variety of services that include wealth management, fund distribution, investment advice, life insurance, securities execution, and clearance, as well as retirement services. Fidelity helps different types of investors in managing equity and balancing mutual funds.

Top 4 Best Fidelity International Funds

1. Fidelity International Index Fund

Fidelity International Index Fund offers a diversified international portfolio at a very low cost to investors. This type of fund does not venture into emerging markets, returns are influenced by lower volatility.

Fidelity International Index Fund tracks the performance of the EAFE index (Europe, Australasia, Far East Index). The fund employs sampling techniques to deliver investment results that match the underlying index.

The European stocks have a 61% allocation while Japanese equities share 25% of the funds’ assets.

With this fund, investors get exposure to industrial and financial stocks, with 14.19% and 15.72% allocations respectively.

The top 10 holdings of the International Index Fund account for only 12.55% of the funds’ assets.

The only downside to this fund is that you cannot access emerging markets and small-cap international stocks.

2. Fidelity Emerging Markets Index Funds

The objective of the Fidelity Emerging Markets Index Funds is to provide investment results that match the total returns of stocks in emerging markets.

Stocks in emerging markets are prone to volatility and are vulnerable to significant declines possibly because of adverse developments from multiple factors such as issuer, economic, political, market, and regulatory factors. These risks tend to be higher in emerging markets where instability is rife in multiple dimensions.

Fidelity Emerging Markets Index Funds employ a strategy of investing 80% of assets that are in the MSCI Emerging Markets Index, and depository receipts that represent securities included in the index.

To attempt replicating returns of the MSCI Emerging Markets Index, these funds use a sampling technique that considers the following factors: industry exposure, capitalization, earnings growth, country weightings, price/book ratio, dividend yield, and the effect of foreign taxes.

3. Fidelity Total International Index Fund

The objective of this fund is to provide investment outcomes that match the total return of emerging and developed foreign stock markets.

The fund invests 80% of the assets in securities that are included in the MSCI ACWI ex USA Investable Market Index, as well as depository receipts that represent securities included in the index.

The MSCI ACWI ex USA Investable Market Index is an index weighted by market capitalization and is designed to measure the investable equity market performance for global investors of large, mid, and small-cap stocks in the developed and emerging markets.

This fund has already accumulated USD1.9 billion in assets under management since its inception in 2016.

This fund offers the highest exposure to international stocks in small-cap and large-cap markets as well as developed and emerging markets.

4. Fidelity Zero International Index Fund

The Fidelity Zero International Index Fund attempts to provide investment results that correspond to the total return of emerging and developed foreign markets.

This fund pays costs incurred during transactions such as commissions in the buying and selling of securities or during portfolio turnover. A higher portfolio turnover, therefore, implies a higher transaction cost, which may attract higher taxes if the fund shares are held in a taxable account.

Fidelity Zero International Index Fund employs an investment strategy of investing at least 80% of assets in securities from the Fidelity Global ex-US Index and depository receipts which represent securities included in the index.

These funds also employ sampling techniques to attempt the replication of the returns of the Fidelity Global ex-US Index. The technique is influenced by factors such as capitalization, dividend yields, industry exposures, price/book ratio, country weightings, earnings growth,  price/earnings ratio, and foreign tax effects.

Some of the investment risks to contend with when investing in Fidelity Zero International Funds include;

  • The volatility of the stock market
  • Passive management risks
  • Correlation to index
  • Issuer-specific changes
  • Foreign and emerging market risk
  • Securities lending risk

What is the Best International Mutual Fund?

The best international index fund is the Fidelity International Index Fund. As of now, the fund manages assets worth $25.5 billion, with a net asset value of $39.08 and a net expense ratio of  0.035%.

This fund tracks the performance of a broad index of the MSCI (Europe, Australasia, and Far East Index). The fund ranks as the best international fund due to its large and diversified exposure of investor assets to stocks, and at a very low cost. The risks in investments are also reduced as the fund leaves out equities from emerging markets, which suffer low volatility.

What is the Safest Fidelity Fund?

Fidelity offers a wide variety of safe and high-quality mutual funds. However, the Fidelity Zero International Index Fund is one of the safest funds to invest in. This fund has a 0% expense ratio, and it aims to mirror the total return of emerging and developed markets. The fund, which is relatively new to the market shows promise to investors who want to get exposed to both developed and emerging markets.

Read more: Best Fidelity Funds for Retirees


Understanding international funds and how they work is crucial in helping investors know the best way of investing. International funds are often buy-and-hold long term investments and therefore need you to be fully aware of the benefits and risks, to ensure that you get maximum returns on your investments.

Fidelity mutual funds offer a wide range of international funds investing options that optimize returns while balancing costs for the investors. They also offer mutual fund investment options that are transparent, cost-effective, and able to hold against competitor funds. The Investoralist is here to help you understand investing, expose you to different types of investments, and compare different options for smarter financial decision making. Learn more about us.

The Top 9 Fidelity Funds for Retirees

Top 9 Fidelity Funds for Retirees

What is a Fidelity Fund?

Fidelity Investments is a financial services corporation based in Boston, Massachusetts. Managing thousands of assets all over the world, Fidelity is most known for offering its clients outstanding fund portfolios that cover mutual funds and all its asset classes, allowing you to utilize a mix of funds for a more tactical and better investment. The most popular ones include actively-managed funds, no-load mutual funds, exchange-traded funds, and of course retirement plans. 

Fidelity funds that are most suitable to cater to one’s retirement plans usually include broad market, low expense ratio ETFs, which by popular opinion, are the best way to invest for almost everyone out there.

How Do I Choose Which Fidelity Funds to Avail?

Fidelity is an incredibly successful and excellent corporation in the field of financial services. Naturally, it offers a wide variety of mutual funds, all high in quality. So when it comes to buying your own Fidelity fund, you can’t help but ask—among all these first-rate funds, which one shall I choose?

Well, for starters, it would be of great help if you are aware of the kind of fidelity fund that you want. We have broken down for you the three kinds of fidelity funds, categorized by the manner of long-term performance, diversity and expense ratio, and balance.

3 Categories of Fidelity Funds

1)   Actively-Managed Funds:

These kinds of funds involve the active buying and selling of portfolio investments by the manager however they choose. More often than not, this is usually done in order for the fund to beat a relative index and may hopefully outperform, say, the S&P 500 index in more years, eventually resulting in a better return in the long run.

2)   Index Funds

Index funds are the kind that include portfolios of stocks that match the components and performance of a benchmark index. Whereas an actively-managed fund may outperform an index, an index fund mimics its benchmark index no matter what the state of the markets is. Fidelity offers some of the most affordable index funds.

3)   Balanced Funds

A balanced fund is a kind of mutual fund that covers several components including a stock component, a bond component, and other kinds all in one portfolio. This kind of fund balances between growth and income, equity and debt. A balanced fund is ideal for those who wish to invest in a single fund with a well-grounded core holding.

The 9 Best Fidelity Funds for Retirees

Here are some of the best Fidelity funds in which to invest that will ensure the likelihood that your nest egg will be ready to hatch upon your retirement years.

1. Fidelity OTC Portfolio

The Fidelity OTC Portfolio fund is categorized as Morningstar under large-growth. 80 percent of the fund’s portfolio is usually invested in stocks traded on over-the-counter markets, including the Nasdaq composite index, and more than 25 percent of the fund is usually invested in the technology sector.

In 2017, under the fund’s former manager, Gavin Baker, the OTC Portfolio held 296 positions (including Apple Alphabet and Amazon), with 46 percent of the portfolio’s value consisting of its 10 largest holdings. With new managers, Sonu Kalra and Chris Lim, the overall fund assets is recorded to have a total of almost $24.87 billions worth of assets invested in 175 separate holdings as of October 20, 2020.

Category placements are ranked from the first to the one-hundredth percentile–placements from the first percentile being the best and placements going towards the one-hundredth percentile being the worst. As of January 31, 2018 the Fidelity OTC Portfolio has placed in the eighth percentile for the trailing twelve months and in the first percentile in the trailing ten years.

If this fund has piqued your interest and you feel you’d like to invest in it, you’d be pleased to know that the Fidelity OTC Portfolio’s expense ratio is only 0.81 percent, classified by Morningstar as below average. It requires no 12 b-1 fee, and asks for an initial investment of $ 2,500.

2. Fidelity Blue Chip Growth Fund

This fund is for those who aim for long-term capital growth, with 80 percent of its assets invested in blue-chip stocks.

Managed by Sonu Kalra, this fund is predicted for above-average and less volatile returns in the long run, with investors reporting positive long-term results. Over the past year, the fund has seen a return of 58.29 percent, 26.19 percent in the past three years, 22.7 percent in the past five years, and 19.13 percent in the past ten years.

Two-thirds of the fund’s holdings are invested in the sectors of technology and consumer cyclical sectors.

The Fidelity Blue Chip Growth Fund has a total of assets reaching almost $41.02 billions, which is invested in 422 holdings and has an expense ratio of 0.78. Investors in this fund usually hold stocks in the Dow Jones Industrial Average or blue chips, most of the time in individual retirement accounts, allowing them to make a fruitful profit.

3. Fidelity NASDAQ Composite Index Fund

The Fidelity Nasdaq Composite Index Fund offers its investors returns that match the performance of the Nasdaq Composite Index, investing at least 80 percent of its assets in the index’s common stocks.

In terms of performance, over the past year, the Nasdaq Composite Index Fund has a return of 40.54 percent, 20.77 percent in the past three years, 20.40 percent in the past five years, and 17.91 percent in the past ten years.

For interested investors, this fund has a 0.29 percent expense ratio and an above-average risk to other funds according to Morningstar.

4. Fidelity 500 Index Fund

This fund mimics the performance of the S&P 500 index, a benchmark for U.S. stocks. 

The Fidelity 500 Index Fund can be very advantageous for an investor as it does not focus on one industry, its investments are placed in diverse sectors. As a result, it can survive volatility.

The fund is recorded to have a total of assets reaching almost $252.11 billion invested in 508 holdings. In the past year, the fund is recorded to have a return of 15.14 percent, 12.27 percent in the past three years, 14.14 percent in the past five years, and 13.73 in the past ten years. The Fidelity 500 Index Fund has a 0.02 expense ratio.

5. Fidelity Total Market Index Fund

Investors for the Total Market Index Fund will benefit from broad exposure in the stock market. This fund holds more than 3,000 sticks but for a low cost. This way, the fund can act as a core fund for portfolios that aim for broad exposures.

As of October 20, 2020, the Total Market Index Fund is recorded to have a total of assets of almost $49.48 billion invested in 3,404 holdings, its top stocks including Apple Inc., Exxon Mobil Corp., Microsoft Corp., Johnson & Johnson, and General Electric Co.

In terms of performance, this particular fund has outperformed more than 80 percent of its peers in the last decade. Although this fund may experience greater declines than the actively-managed funds during market selloff, its volatility has not had any major changes and has remained about the same.

In the past year, the fund is recorded to have a return of 14.76 percent, 11.54 percent in the past three years, 13.62 percent in the past five, and 13.43 percent in the past decade.

The Total Market Index has a 0.02 percent expense ratio.

6. Fidelity Growth Strategies Fund

The Fidelity Growth Strategies Fund is perfect for investors who seek capital appreciation. This fund focuses on companies that are deemed to potentially provide growth in revenue and expedited earnings — mostly investing in medium-sized companies and domestic and foreign issuers.

Over the past year, the fund has a recorded return of 22.78 percent, 15.15 percent in the past three years, 1.28 in the past five, and 12.88 percent in the past ten.

7. Fidelity Extended Market Index Fund

For investors who wish to have a total exposure to the U.S. stock market, the Fidelity Extended Market Index Fund offers additional opportunities, the fund holding smaller domestic stocks, which includes larger names that are not included in the S&P 500 Index.

The fund mimics the performance of its benchmark, so its returns have been in line with the index. As investors do not need to pay large management fees in index funds, they tend to pocket a greater percentage of fund returns compared to other funds.

The fund holds a total of almost $24.92 billion worth of assets invested in 3,102 holdings as of October 20, 2020 and a return of 11.24 percent within the past five years, and 12.05 percent in the past ten years.

The fund has a 0.05 percent expense ratio.

8. Fidelity Real Estate Investment Port

The Fidelity Real Estate Investment Port is for people who wish to achieve an income of above-average and long-term capital growth.

Usually, 80 percent of its assets are put into investments that are related to real estate. It is non-diversified and invests in both foreign and domestic issuers.

In the past year, the fund has a recorded return of -14.40 percent, 1.75 percent in the past three years, 4.94 percent in the past five, and 8.52 percent in the past ten.

9. Fidelity Balanced Fund

The Fidelity Balanced Fund offers its investors a wide variety of investments balanced between stocks and bonds.

The fund has a recorded total of assets reaching almost $36.9 billion invested in 2,224 holdings. It has a portfolio holding positions in 1,828 securities, including Autodesk, Apple, Alphabet, and many others.

As of mid-November 2017, according to Morningstar, the fund has placed in the tenth percentile for the last 12 months, ninth for the past three years, sixth in the past five, and in the twenty-first percentile in the past ten years.

In the past year, the fund has given a return of 17.81 percent, 10.76 percent in the past three years, 11.27 percent in the past five, and 10.37 in the past ten. 

The fund has an expense ratio of 0.53 percent.

Check out here for the 10 Best Fidelity Low Risk Funds.

Why Should One Invest in Fidelity Funds?

The stock market may seem quite confusing and fickle. There are plenty of factors that one must consider. However, with enough knowledge in the field and with the right assistance, you have plenty to gain in investing in Fidelity funds designed for retirement plans. Just keep an open mind and remember to invest responsibly. Plenty of opportunities await you!

If you seek further assistance and insight in choosing and acquiring the right stocks, you may visit Investorialist’s website. They offer an outstanding service at a very affordable cost.

Charles Schwab Dividend ETF: An Overview

Charles Schwab Dividend ETF

Schwab US dividend equity ETF is worthy of consideration for income-seeking stock investors who look for investment quality and stability. There are 25 ETFs that are managed by Charles Schwab Investment Management that will truly help you in building the foundation of your portfolio.

What Are Dividend Charles Schwab ETFs?

Exchange-traded funds (ETFs) are a type of investment fund and they carry stocks that have a history of distributing dividends to their shareholders. It is important to note that ETFs do not guarantee dividend payments. However, they guarantee coupon payments on bonds.

Charles Schwab ETFs give clients access to a variety of exchange-traded funds from low-cost Schwab ETFs that are used as a good foundation for one’s portfolio to wider or broader ETF selections (other than Charles Schwab ETFs) that shall be used to further strengthen such portfolio.

What Are the Advantages and Disadvantages of Charles Schwab Dividend ETFs?

Charles Schwab dividend ETFs are known to generate cash flows which investors really look forward to. Many investors believe that a company’s performance is measured by its ability to generate returns or profits for shareholders in the form of dividends.

Before making any critical decision as regards your portfolio, it is imperative to know the common advantages and disadvantages of Charles Schwab dividend ETFs.

Advantages of Charles Schwab Dividend ETFs:

  • Charles Schwab Dividend ETFs provide portfolio diversification.
  • May generate a regular revenue income stream based on investing assets and stock funds.
  • Payouts may continue even when company earnings are down.
  • Charles Schwab Dividend Equity ETF can provide a stream of income and long-term growth. Schwab U.S. dividend ETF has low management fees, respectable total return, and high assets liquidity.

Disadvantages of Charles Schwab Dividend ETFs:

  • Future dividends are not guaranteed by Charles Schwab Dividend ETFs.
  • Charles Schwab investing funds yield may be offset by an unprecedented decline in the price of a stock.
  • Dividends and stock funds are taxed specifically during the year that shareholders expect to receive them.

What Are the Factors to Consider When Choosing Charles Schwab Dividend ETFs?

The high-yield or long-term growth potential of dividend ETFs is often used to characterize them. Schwab ETFs offer two different methodologies that can work well together. Hence, in choosing best dividend ETFs, consider the following:

  • Dividend growth. The dividend growth strategy screens for companies that have a history of increasing dividends over time but may have a lower current yield.
  • High yield. High yield strategy screens for companies that have the highest current yield but may have unsustainable dividend payments over time. ETFs tend to give focus on how the company pays a dividend and how that yield is part of the portfolio.

Why You Need to Invest in Charles Schwab ETFs?

There are points of considerations that you should know on why you should finally invest in Schwab ETF:

1. Diversification

A Schwab US dividend equity ETF makes it possible for you to diversify your portfolio in the most efficient way possible because you will no longer have to select individual stocks or bonds.

Schwab ETFs offer you a broad selection as they cover most major asset classes.

In order to ensure that everyone gets to have access to ETFs, especially those sectors where it may be difficult to buy and sell individual stocks and bonds, there are international ETFs, regional ETFs, and ETFs for particular industries.

2. Low cost

  • The asset-weighted average operating expense ratios (OERs) for Schwab ETFs is only 0.05%.
  • These OERs for Schwab ETFs tend to be low which is usually lower than they are for actively managed mutual funds.
  • Another benefit from Schwab is that online ETF trade commissions are free of charge per trade.
  • Some of the costs most commonly associated with Schwab ETF are Operating expense ratio (OER), trade commissions date funds, bid/ask spreads, and services premiums.

3. Trading flexibility

One good thing about Schwab ETFs is their versatility as they allow you to easily move or transfer money between specific asset classes that may include stocks, bonds, and commodities. Schwab ETFs allow flexibility when it comes to trading them because just like stocks, you can trade ETFs anytime within market hours every single day.

4. Transparency

Many, if not all, ETFs are transparent about their holding on a day-to-day basis. Active semi-transparent ETFs disclose full portfolio holdings to investors either monthly or quarterly, with a lag.

A Schwab ETF typically holds the top securities as the specific index or benchmark they track, although some may hold a representative sample of the top index securities.

5. Tax efficiency

ETFs usually pass through fewer capital gains to investors because of lower turnover and the in-kind redemption process.

Why Is Charles Schwab the Best Dividend ETF to Invest in?

The following are the areas of considerations in choosing or determining the best dividend ETF:

1. Commissions

Just like any other exchange-traded security, commissions are paid at every buy and sell ETF transaction. As a consequence, these commissions will add up over time, and hence, they entail additional ETF cost on your part.

Remember, however, that not all brokers will be charging you such commission when you trade an ETF online. You have to check whether or not the commission is to be paid before trading.

Pro Tip: Schwab ETF has 0% online commissions.

2. Spreads

Apart from the commissions paid, investors would also have to pay the “spread” either in buying or selling ETF. This spread refers to the difference between the higher price paid to acquire a security and the lower price at which you can sell such security.

Remember that the wider the spread, the higher the cost.

3. Premiums and discounts

Unlike mutual funds that are bought and sold at net asset value (NAV), Charles Schwab ETF is bought and sold at market price. As a consequence, investors may pay more for Charles Schwab ETF than the value of underlying stocks or bonds. This is considered a premium.

On the other hand, investors may also sell Charles Schwab ETF for a value that is less than the value of its holdings. Such is considered as a discount.

4. General liquidity

Market makers affect Schwab ETF’s liquidity. Market makers refer to firms that standby to buy or sell an ETF at any given point in time.

The more interested market makers there are, the closer the highest and lowest offered prices to sell there will be. Likewise, ETFs with lower liquidity tend to have larger bid/ask spreads.

5. Market volatility

Market volatility leads to the widening of ETF bids. Hence, it is important to pay attention to market trends. Moreover, market volatility affects premiums or discounts of net asset values which may result in higher costs for the investor.

Final Thoughts

Take advantage of the expertise of Schwab in building a strong ETF portfolio. Schwab believes that your ETF investment will depend primarily on the type of investor that you are.  Charles Schwab upholds that financial transparency is a prerequisite to being in charge of one’s financial life. Such transparency will result in better investing performance as measured by better total returns. In learning a particular Schwab ETF (like the Schwab 1000 Index ETF) and other services, make sure to get detailed information about fees and expenses, risk, investment strategies, and investment policies on Schwab’s website.  For more financial articles and Pro Tips on how to get the best investments in the market today, read our financial articles here in Investoralist, and learn more about the best trade techniques today! 

Robo-Advisor Vanguard Review: How it Compares

Robo-Advisor Vanguard review

Tailored Personal Advisor services have always been popular in the US, but today’s savvy investors demand a little more than traditional financial advisors and basic financial planning. The market is monitoring investor trends, and the most innovative investment companies are expanding their portfolio management service types to include state-of-the-art “Digital Advisor” offerings that enable investors to keep track of their finance situation and investments online.

One of the most talked-about financial advisors right now is Vanguard – a longstanding investment management provider that has traditionally ranked highly in top money expertise guides for decades. Right now, Vanguard provides an advisory service that combines traditional “human” Vanguard Personal Advisor services with an innovative “Robo Advisor”, providing customers with the best of both physical and digital advisory services. 

Let’s take a look at how Vanguard’s Robo Advisor works and what it could mean for your investment portfolios in the long term.


  • Investors get two-in-one, comprehensive portfolio management
  • Overall advisory fee costs are lower than many competitors
  • Access to both human financial advisors and Robo Advisors
  • Investment selection and asset allocation are top-notch


  • There is no tax loss harvesting available 
  • The account minimum of $ 50 000 might be too much for smaller investors
  • Vanguard’s website can be a little confusing
  • Investors must switch their portfolios over to Vanguard to participate
Editor’s Rating: 4 Stars

Here at Investoralist we’ve seen a lot of innovative, low cost account management solutions on the market targeted squarely at investors. But few offer the two-in-one convenience, $ 50 000 account minimum and low cost advisory fee charges of the Vanguard corporation’s latest offering – which is ideal for big money investors.Vanguard provides an investment management service that’s perfect for banking investing, raising money for student loans and virtually all other investor needs. It’s also affordable in the long term and very competitive as far as management fee charges are concerned – especially if you have built up hefty savings.

That said, while Vanguard Personal Advisor services offers plenty of tax minimization strategies, the fact that investors can’t pursue tax loss harvesting is a major downside. What’s more, the quirky website functionality means that keeping track of your Vanguard funds and assets under management isn’t always so straightforward when compared to competitors. 

The Bottom Line

In all, we would definitely recommend the latest Robo Advisor / human advisor offering from Vanguard, on account of the innumerable benefits on offer. However, we’d ask readers to please review what the competitors are offering before signing up, as Vanguard might not be the best option for everyone – especially if tax loss harvesting is important to you or your savings are in the sub $ 500 000 mark.

At a Glance 

First founded in 1975 over in Valley Forge, Pennsylvania, Vanguard has been a household name in financial planning for decades, so you certainly don’t have to worry about reputation when considering this giant’s Robo Advisor, Digital Advisor and Human Advisor services.

If you need to keep better track of banking investing mortgages insurance and more, Vanguard can certainly help, but how? Let’s take a brief look at what investors can expect from the latest “Human Financial Advisor meets Robo Advisor” service – and how it compares against Vanguard’s most basic Digital Advisor only service, which simply grants investors a standard online investment account. 

The two-in-one service we’re focusing on predominantly in this review, which combines the best of both words, is known as Vanguard Personal Advisor Services (Vanguard PAS). 

Vanguard Personal Advisor Services: The Basics Explained

Standard Vanguard Digital AdvisorVanguard PAS (two-in-one)
What is it?A standardized online investment serviceA two-in-one service combining trained human advisors and digital Robo Advisors
What is the minimum investment amount?$ 3 000$ 50 000
What are the top features?● Online retirement planning interface
● Low fee Vanguard ETFs
● Customizable investment plans
● Fully driven by human advisors and Robo Advisors
What does the fee structure look like?● 0.15% of AUM for the Digital Advisor only service● 0.30% AUM on account balances less than $ 5 million
● 0.20% AUM on account balances between $ 5 and $ 10 million
● 0.10% AUM on balances between $ 10 and $ 25 million
● 0.05% AUM on balances of $ 25 m or higher
Are there any set-up or onboarding fees?NoNo
What accounts are available?● Individual investment accounts
● Joint investment accounts
● Roth
● Traditional accounts
● Simple/rollover IRAs
● Trusts
● Individual investment accounts
● Joint investment accounts
● Roth
● Traditional accounts
● Simple/rollover IRAs
● Trusts
What investment funds are available for asset allocation?4x Vanguard stock exchange traded funds and bonds availableA broad and varied selection of low fee stocks and bonds on offer
Do I get any additional services for free?Yes – a wide selection of educational resources Yes – a wide selection of educational resources

Pros and Cons of Vanguard Robo Advisor

We briefly looked at the pros and cons of Vanguard Personal Advisor Services at the beginning of this review, but let’s dig a little deeper and explore what the Robo Advisor – Human Financial Advisor hybrid really offers to investors.


1. Low Management Fee

As you can see in the table above, Vanguard provides a low cost management fee that starts out at just 0.30% for entry level investors with between $ 50 000 and $ 5 million. That said, if your total savings and brokerage accounts across all account types add up to more than $ 5 million, you’ll get an even better deal, as the tiered fees just keep on falling the higher your savings climb – with no upper limit!

In our opinion, the Vanguard marketing corporation simply hasn’t done enough to shout about how great these fees really are. It’s worth noting that one of Vanguard’s key competitors in this arena, Schwab Intelligent Portfolios, charges a premium of $ 30 per month for their hybrid robo service, which in real terms actually equates to 0.72% in comparison to the 0.30% offered by Vanguard. What’s more, other advisors often charge an annual fee on top! The investment management service offered by Schwab does offer unlimited access to human investment planners, however, so is still worth considering as a viable alternative.

2. Investments and Expense Ratios

One thing we love about Vanguard Personal Advisor Services is the way this two-in-one service builds truly tailored portfolios for its clients. Whether you want stock exchange traded funds or bonds, Vanguard funds are consistently broad and varied, so you can be sure of top-notch asset allocation and excellent expense ratios.

In fact, money expertise guides and practically every investment website across the web have recommended Vanguard as one of the best financial planners on the market for expense ratios – and we tend to agree. Whether you’re looking for the best mutual funds and retirement accounts or just long-running financial advice and a state-of-the-art Robo Advisor investment service, Vanguard is a solid choice, even when compared to Schwab.

3. Comprehensive Management

With Robo Advisors at your fingertips and trained human financial advisors just a phone call away, asset management doesn’t get much more comprehensive than with Vanguard. You can expect Vanguard’s advisors to take direct portfolio management control of any retirement accounts, brokerage accounts or trusts you may hold. But the team will also go the extra mile when it comes to considering your other savings and assets, too.

As we mentioned earlier, Vanguard Personal Advisor Services will take a tailored approach each and every time, which means that if you tell your advisor about your student loans or college savings, 401 k or any other assets, these will all be incorporated into your overall financial plan. Now obviously, anything held in accounts owned by banks, companies or financial institutions other than the Vanguard group will not fall under Vanguard’s complete control – but you can still expect top-notch advice from both trained human advisors and Robo Advisors who understand the bigger picture.

4. Financial Advisors

Now, anyone looking solely for a Robo Advisor or Digital Advisor service wouldn’t be opting for this two-in-one package, so you’ll be happy to learn that human financial advisors make up a big chunk of what’s so great about Vanguard Personal Advisor Services. We all need someone to turn to for financial advice when our portfolio management needs get a little too hot to handle – which is why it’s super reassuring that Vanguard has some of the best trained financial planners in the business; human-wise, not robo!


1. Account Minimum

Compared to other investment management account types, the Vanguard Robo Advisor account minimum of $ 50 000 might be a little out of reach for smaller or more modest investors. It’s clear from the way the Vanguard Marketing Corporation has advertised the Vanguard PAS that the two-in-one product is aimed predominantly at wealthier savers with broad and varied portfolios.

Now, if you’re lucky enough to have $ 5 million, $ 25 million or even more stashed away, you’ll benefit immensely from those low cost AUM fee structures, but if your mutual funds, college savings and accounts total $ 500 000 or less, you might want to shop around to see whether Schwab or other investment management companies can offer you a better deal. And if you’re savings are sub $ 50 000, then Vanguard PAS won’t even be an option for you at all – which we think is a real shame.

2. Tax loss harvesting

One of the biggest pitfalls with Vanguard Robo Advisor services is that tax loss harvesting, which enables investors to sell securities at a loss to offset their capital gains from better-performing investments, is a complete and utter no-no. Fortunately, however, Vanguard does offer a handful of viable tax minimization alternatives, such as tax-advantaged investment strategies. 

Vanguard PAS encourages investors to focus on more tax-efficient approaches to investment from the outset and explore the potential of tax-exempt municipal bonds in taxable accounts. The Vanguard Group also works to reduce investors’ tax burden by selling off quantities of securities with the greatest losses, but this approach arguably isn’t as effective as the traditional kind of tax loss harvesting offered by Schwab and other competitors. Sadly, Vanguard’s tax strategies leave a lot to be desired, especially if you’re the kind of investor who prefers – or has grown used to – financial advisors carrying out day-to-day monitoring of tax harvesting windows to present you with solid savings opportunities as and when they arise. Consider taxes travel calculators a thing of the past.

3. Customer Feedback

The Vanguard group typically ranks highly across investment reviews websites and magazines or trade press ratings of financial advisor services. That said, our advice would be to please review any genuine customer experiences shared on sites like TrustPilot or other consumer-facing reviews sites. Full advertiser disclosure here: real people can sometimes be a more reliable source than a glossy advertorial in the Wall Street Journal, and it always pays to do your research before making any big decisions in regard to financial planners or your financial situation.

Vanguard is such a tried-and-tested name in US investment that you can’t go too far wrong, but it is worth noting that many consumers have complained about the Vanguard website being a little confusing or difficult to use compared to those of competitors. We’d recommend having a play for yourself before committing to Vanguard as your one and only robo advisor.

How Does the Vanguard Digital Advisor – Human Advisor Hybrid Compare?

So, we’ve examined the pros and cons of Vanguard Personal Advisor Services in real terms and the things you should probably think about before signing up. But with so many great investment platforms on the market, how does it compare to what competitors are bringing to the table? Let’s look at the top similarities and differences.

Robo Advisor Comparison

Financial PlannersCommissions and Costs Account MinimumCurrent PromotionsInvestoralist Rating
Vanguard PASTiered management fee from 0.05% to 0.30%$ 50 000N/A4/5
Schwab Intelligent Portfolios$30 per month flat fee$ 5 000N/A5/5
Betterment 0.25% management fee$ 0Get up to 1 year with no fees when making a qualifying deposit4/5
Wealthfront0.25% management fee$ 500Get up to $ 5 000 worth of assets managed absolutely free5/5
Stash$ 1 – 9 per month$ 0Get free cash credit up to $ 510 with a qualifying deposit4/5
Ellevest$ 1 – 9 per month$ 0N/A5/5
Ally Invest Managed Portfolios0% to 0.3% management fee$ 100N/A4/5

What is Unique About Vanguard?

Between the obvious reputation benefits of the Vanguard Group, its two-in-one advisors and highly rated customer service, there are a number of reasons you might want to consider Vanguard over its competitors. But we think the standout benefit is that Vanguard Personal Advisor services offers tiered management fees that are simply hard to beat for bigger money investors.

As you can see from our comparison, most financial planning companies will charge a flat monthly fee or a management fee of around 0.25% for using their digital advisor services – which might not always come combined with human financial support. However, Vanguard PAS’ sliding scale of management fees could see you paying as little as 0.05 % on mega AUM balances of more than $ 25 million – making it the obvious choice for wealthier investors who want to cut costs.

Is Vanguard Right for You?

Seeking any kind of financial advice, banking investing tips or portfolio management services will always be a personal affair. There is no one-size-fits-all approach to personal advisor services, but Vanguard’s two-in-one tailored customer service certainly does a fantastic job of trying to meet each client’s individual needs.

If you’re a big money investor with a hefty risk tolerance and a desire to cut down on management fees, Vanguard PAS is pretty much perfect for you. However, you’ll need to be happy to move your accounts into Vanguard funds and not particularly interested in tax loss harvesting in order for it to work. The tiered management fees offer great deals if you’re wealthy enough to slide up the scale, but people with sub $ 500 000 funds or those who can’t meet that $ 50 000 account minimum might want to investigate what other options are available.

Investoralist – Helping You Make Better Investment Decisions

Here at Investoralist, we’re all about making investments easy. Vanguard PAS is a great way to ramp up your investment journey, but there are many other things you can do to improve your financial situation, from investing in stocks and shares, to trying out tax tips, venture capitalism, retirement accounts, 401 k and more. 

Browse our diverse range of investment blogs and articles and make smarter investment decisions today.

8 Best Charles Schwab Index Funds for Your Investment Portfolio

8 Best Charles Schwab Index Funds

A lot of investors could testify that the Schwab index funds have always been one of the main choices for those who would want long-term investments. Throughout the decades, the Schwab index funds as an institution has evolved to become even more attractive to investors than ever before.

The fund now offers a wide array of index funds, from equities in the country, up to international stocks that have very low and competitive expense ratios.

But what is the Charles Schwab anyway and how can this help my financial portfolio as an investor? In this article, we will tackle its offerings, its differences with other index funds, and which type of Charles Schwab in the stock market would best suit your portfolio development interests.

8 Best Charles Schwab Index Funds for Your Investment Portfolio

1) Schwab S&P 500 Index Fund (SWPPX)

The Schwab S & P 500 Index Fund is one that gives investors returns of over 13% in a decade-long period. Engaging with the Schwab S & P 500 index fund SWPPX is also known to be more affordable for investors than with so many competing funds. The expense ratio for this is relatively small, as capped at 0.02%.

2) Schwab Total Stock Market Index Fund (SWTSX)

This Schwab total stock market index fund gives investors exposure to the US stock market index as a whole from small to large cap stocks. You can even own more than 3,000 stocks just by purchasing one of the many mutual funds, because asset allocation is based on the capitalization of the market.

With an expense ratio of 0.03%, along with very low management expenses, you can lead to a larger return in the long run.

3) Schwab 1000 Index Fund (SNXFX)

If you are more interested in mid to large cap funds and not really the small cap index fund, then the Schwab 1000 index fund is something that you can consider. It is similar to the S & P 500 index, but it allows the inclusion of 500 stocks more (hence 1000).

4) Schwab Small Cap Index Fund (SWSSX)

The Schwab Small Cap Index Fund, as the term implies, tracks small-cap indexes, and comprises 1,992 stocks.

Over the recent decade the SWSSX benefitted investing individuals with annual returns of 12.63% and with a 9% average since 1997.

The expense ratio for this is at 0.04%.

5) Schwab Fundamental US Large Company Index Fund (SFLNX) 

The Company Index Fund brought about by the SFLNX has given so much success stories for investing individuals. It lessens the exposure to U S large cap stocks in the market that may have already surpassed their value based on fundamentals. It also promotes reallocation automatically based on fundamental measurements.

Furthermore, the portfolio of the fund portfolio has a higher turnover than with an S P 500 index mutual fund. The expense ratios for this is usually high and pegged at 0.25%, but is still below average than the other actively managed mutual funds out there in the broad market.

6) Schwab Fundamental US Small Company Index Fund (SFSNX)

Opposite to SFLNX discussed above, this index fund focuses on small companies, some of whose brands are the ones might not be familiar to you yet. The fundamental reallocation strategy of SFSNX is one that lessens the exposure to those stocks that may have run themselves in the market a bit too fast and too far. For reallocation, the investment of the funds then focuses on stocks that may seem to have less value based on the fundamentals they come along with.

If you engage with this fund, you will expect to pay the same expense ratio to that of the SFLNX at 0.25%, which is again lower than the average mutual fund that is actively managed.

7) Schwab Fundamental International Large Company Index Fund (SFNNX)

This bond index fund is one that focuses on tracking international companies. The funds comprise the biggest international companies, where approximately 25% of the investments are from those in Japan, while 16% of the pie are for companies that are based in the UK.

With an expense ratio of 0.25%, you can get a price to earnings ratio of 12.66%!

8) Schwab Fundamental International Small Company Index Fund (SFILX)

Lastly, the SFILX is a Charles Schwab Fund that gives concentration on the international investments of developed countries. With this, you can expect to have higher turnover with small cap low cost index funds.

The expense ratio is pegged at 0.39% which is competitively lower than the other funds, and comes with a better performance at 2.34% for yield.

Is Charles Schwab Index Funds right for you?

If you would want to stay competitively in the stocks market then the Charles Schwab Funds is definitely right for you. With low cost and operational expense ratios, you can definitely expect better ETF returns even amidst emerging markets.

About Charles Schwab

Founded in 1971, the Charles Schwab corporation is one that really made a remarkable name in the world of investment. It started out as an investment newsletter service which evolved into a broker-dealer institution.

After having adapted to various external factors and economic evolution, the corporation now has more than 350 brokerages throughout the country. Today, the company provides investment services that come along with more than 50 funds and ranks as the top 3 largest mutual funds companies on the basis of assets under management.


The mission statement of the company clearly points out how they promised to empower individuals who would want to invest and engage in the economic market.

To achieve this promise, they have come up with various offerings and services to all those who would want to be a part of the economic system.

Let’s talk about these services and the accounts that come along with them:

1) Brokerage accounts

As founded in retail brokerage services, Schwab has been renowned to bring services that the average investor can expect. Today, they have these both in online accounts, as well as offline–in retail branches.

They offer brokerage accounts with trades as low as zero dollars to keep investing very much financially affordable for pretty much everybody. A lot of brokerage accounts in this company do not require a minimum initial investment to start your money rolling.

Designing their brokering services this way has made investing accessible to all, but also cost-efficient as well.

2) Trading solutions

Brokerage accounts are not the only ones being offered, but research tools and an easy-to-use trading platform are also being offered. With these, market data and other relevant information are now at the fingertips of investors, empowering even more than ever.

They offer research through the website, and through their mobile app, which gives you the informed choice you will be needing whenever you are out there trading.

3) Automated Investing

If you would want to engage in the stock market but put your hands off from it, this company has made it possible for you to do so. Your investment growth can now be fully automated with their automated investing feature, where you can set up automatic reinvestments so that your earnings and other dividends have the room to grow in your registered and nominated account.

The company also offers robo advisors which serve as an automated financial manager that can help you build your financial profile and keep you diversified in the market. It also rebalances the numbers in your account whenever deemed necessary so that you can easily track the growth of your planted seeds.

A lot of investors who have other agenda throughout their regular day opt to choose to have their investments automatically monitored. All you have to do is to wait and witness your account grow as it is being overseen by an automated expert.

4) Schwab Global Accounts

Nobody wants to get encased just in the domestic stock market. This is why Schwab has evolved into creating global accounts, which have given investors access to the leading accounts in the worldwide stock market–all at the tap of your fingertips.

As an investment company that stands true to their principle on accessibility, no minimum investment capital is required (meaning no trade minimum and no account minimum). This opens so many doors to the leading markets across the globe.

5) Education Savings Accounts

As parents, students, and young professionals, we all probably know by now how much high and expensive educational costs are. This is why the company has created service products for investors to save solely in the context of education even from kindergarten until college.

These education savings accounts are really designed for you to be able to save money for the future. For example, when you withdraw from your ESA (educational savings account), you won’t have to pay for taxes when it comes to qualified education expenses. You won’t have to pay for an account minimum to start investing in this fund.

Make sure that when using this fund, you can save more when you spend it on “allowed expenses.” Such expenses include, but are not limited to, tuition and school supplies.

6) Retirement accounts

Of course, you can expect that retirement investment accounts is one thing that will never go missing from the Schwab suite. You can choose between Roth IRA or a traditional IRA in Schwab’s retirement account service, or you can even start with a “Rollover IRA” so that you can transfer your retirement funds from another source, and into your portfolio with Schwab.

If you are a self-employed individual, than a Simple IRA or even a SEP IRA are one of the many efficient ways to plan for your future when it comes to their retirement accounts and investment products, including the Schwab health care fund.

Bottom line

The Schwab Funds come with a wide array of tools, services and investment products. Even if it does not have as much funds as the other companies, your needs could still be met because of the variety of their cap stocks products and their very competitive expense ratio.If you would want to know more about mutual funds or the securities index fund industry, then know that Investorialist is your go-to website for so many references. Known as one of the best financial websites out there, Investorialist is really one that will equip and empower average stocks investors like you!

Top 3 Best Fidelity Mutual Funds for Bear Market

Best fidelity mutual funds for bear market

The coronavirus pandemic hurt the world not only physically but also economically. During these times, investors may find investing too risky and scary. An answer to this apprehension is investments in mutual funds for bear markets.

There is a bear market when a market experiences prolonged price declines. It usually happens when securities prices fall 20% or more from recent highs or widespread pessimism and negative investor sentiment. 

While bear markets are typically identified with the decline in an overall market or index, a decline of 20% or more over a sustained period of time on the individual securities or commodities can also make the market in a bear market.

What Causes Bear Markets

Generally, hiring, wage growth, inflation, and interest rates are monitored as economic signals that may affect the economy’s slowing.  

In particular, low employment, low disposable income, weak productivity, and a drop in business profits manifest a weak or slowing economy. 

In the COVID-19 pandemic case, there are some different indicators like widespread closures, spikes in unemployment claims, and social distancing measures that caused the market’s slowing.

During this time, many investors fear losses of their investment. However, there are different ways where an investor may protect its investment. In this article, you will learn the best actions you may take to keep your funds intact.

3 Fidelity Mutual Funds for Bear Market

During a bear market, investing in mutual funds is advisable to help manage the risks. These bear market mutual funds are funds comprising an entire stock index. The advantage of mutual funds is that they have a diverse portfolio. While the market is in bear, not all stocks are affected the same way.

This article shares with you three best Fidelity Mutual Funds that you may want to consider. Investing in any of the three mutual funds during bear markets may help you reduce the risk of losses. The top three mutual funds of Fidelity Investments are Fidelity Balanced, Fidelity Contrafund, and Fidelity Focused Stock. Now more than ever, it is important to choose these Fidelity Mutual Funds.

1. Fidelity Balanced

  • Total Return During 2018 Downturn:
  • Expense Ratio: 0.52%
  • Assets Under Management: $41,202.55 ($M)
  • Benchmark Index: S&P 500
  • Inception Date:  November 6, 1986
  • Fund Adviser/Distributor: Fidelity Investments

The fund’s strategy is to invest approximately 60% of its assets in stocks and other equity securities and the remainder in bonds and other debt securities when its outlook is neutral. The fund likewise invests at least 25% of total assets in fixed-income senior securities. This includes debt securities and preferred stock. 

2. Fidelity Contrafund

  • Total Return During 2018 Downturn:
  • Expense Ratio: 0.77%
  • Assets Under Management:$136,386.45 ($M)
  • Benchmark Index: S&P 500
  • Inception Date: May 17, 1967
  • Fund Adviser/Distributor: Fidelity Investments

Fidelity Contrafund is to invest in companies whose value FMR believes is not fully recognized by the public. The fund is investing in either growth stocks or value stocks, or both. It primarily invests in common stocks.

3. Fidelity Focused Stock

  • Total Return During 2018 Downturn:
  • Expense Ratio:  0.88%
  • Assets Under Management: $3,573.44 ($M)
  • Benchmark Index: S&P 500
  • Inception Date: November 12, 1996
  • Fund Adviser/Distributor: Fidelity Investments

The fund normally invests at least 80% of its assets in stocks. Like Fidelity Contrafund, the fund invests in either “growth” stocks or “value” stocks or both and primarily in common stocks. If you seek the potential for long-term share-price appreciation, you can consider investing in this fund. However, you must be willing to accept the generally greater price volatility associated with growth-oriented stocks.

How to Invest During a Bear Market

Besides knowing the best Fidelity Mutual Funds, we also provide you with some practical tips in protecting your investments during bear markets. There are four other ways to help mitigate the impact of a bear market. These are dollar-cost averaging, diversity of your holdings, knowledge of stocks that perform well during the recession, and focus on the long term.

1. Do dollar-cost averaging

Dollar-cost averaging is a strategy in the stock market wherein you continuously invest money over time and in roughly equal amounts. This is a more prudent approach during a bear market. This strategy aims to ensure that you don’t pour all your money into the stock at its high.

For example, there’s a slump of 25% in the stock price. A usual $100 a share is now $75 a share. You may be tempted to buy more of this stock and take advantage of the lower price. However, given how volatile the market is, this value may not still be the bottom of the share, and it may tumble 50% or more from its high.

This shows how risky and scary a bear market can be. However, the stock market has shown that it will bounce back eventually. Our advice is to change your perspective that you should focus on the potential gains instead of looking at potential losses. In this way, a bear market may serve as a good opportunity to buy stocks at lower prices.

2. Diversify your holdings

Another strategy is to diversify your holdings. This is a valuable move, regardless of the existence of a bear market. To diversify your portfolio, you must invest in a mix of different assets.

All companies in a given stock index such as the S&P 500 generally fall when there is a bear market. However, all companies do not fall in similar amounts. If you have a diverse portfolio, then the fall of the market will have different effects. This helps you minimize the overall loss of your holdings.

Certainly, knowing in advance who the winners and losers during the bear market are not easy. When there is a bear market, chances are investors favor assets. Hence, another “defensive” strategy worth considering is to check if your portfolio contains assets such as dividend-paying stocks and bonds.

  • Dividend-paying stocks– even stocks the pricks do not go up, some investors still want to get paid in the form of dividends. Thus, it will help you if you have dividend-paying stocks.
  • Bonds prices of bonds move in the opposite direction of stock prices, making it an attractive investment during bear markets. In other words, when stock prices are low, prices of bonds are high.

Related: Top High-Yield Fidelity Funds for Dividend

3. Know and invest in the sectors that perform well in recessions

Another strategy in minimizing the impact of recessions is to observe the trend of different sectors’ performances during hard times.  Investing in sectors that perform well in recessions lessens the risk of losses. Hence, good observation of how different sectors behave during bear markets is key.

You have the option of investing in a specific sector through index funds or exchange-traded funds (ETF).  Index funds or ETFs are more diverse because each fund holds shares in many companies. This feature exposes you to companies in particular industries that may likely be more stable during recessions. 

4. Your focus must be on the long-term.

As mentioned earlier, history has proven that the stock market does bounce back. Thus, while the bear market may be burdensome, you may focus on long-term investments. 

Remember that what you endure during the bear market may be overshadowed by bull markets. Likewise, be mindful that money needed for short-term goals, such as those expected to be achieved in less than 5 years, should not be invested in the stock market.

Perhaps, one of the challenges when there is a bear market, is to resist the temptation of selling your investments. Thus, it is also wise and prudent to let fund managers handle your investments.  Financial managers act as vanguards of your investment. This is still true even if the market is in good condition.

How Can I Tell When a Bear Market Is Coming?

From the definition of a bear market, it is clear that it is not easy to determine whether you are entering a bear market. However, investors have some rules of thumb. 

One practical tip is to monitor interest rates. A good clue of an impending bear market is when the Federal Reserve lowers interest rates due to a slowing economy. 

It is important to note that warning indicators of the bear market should not affect your investment strategy. In the case of long-term investments, investors should not bother predicting the market. Rather, they should ensure that their portfolio is funded with money that they will not need for the next five years, and such funds must likewise be well-diversified and aligned with their risk tolerance. This will make them ride out the highs and lows of the market. 

What’s the Difference Between a Bear Market and a Market Correction?

Market corrections are brief and relatively short. The shallow drops in stock prices are between 10% to 20%. Case in point, during the bull market from 2009-2020, there were six market corrections in the S&P 500.

Moreover, market corrections may lead to bear markets, but more often, they do not. In the years 1974-2018, of the 22 market corrections, only 4 turned into bear markets. Those are essentially the differences between a bear market and a market correction.

What’s the Difference Between a Bear Market and a Bull Market?

A bull market is the opposite of a bear market. There is a bull market when prices in the financial market are rising or are expected to rise. The term is mostly used in the stock market, but it can also be applied to trade, such as bonds, real estate, currencies, and commodities. The term bull market only refers to extender periods in which a large portion of security prices are rising. This period may last for months or even years.

Bottom Line

Knowing where to invest helps you maximize your funds, whether during low or high of the market. Regardless of the market climate, you can still get a great investment provided that you invest in the right way and at the right time. 

As mentioned in this article, there are multiple ways that you can do with your funds, depending on the status of the market.

Apart from sharing where to invest, our advice is that that you consult any financial or fund managers to ensure that your fund or income will not be put to waste. 

The value of your financial assets may continue to improve even while the stock market is at its low. Knowing where to put them is always the key.To learn more about mutual funds and the investment world, subscribe to our newsletter.