Fact Check: Top Four Fidelity Index Funds for Wealth Building

When you need to building real wealth is your goal, the tools you choose matter enormously. Fidelity is one of the best

platforms out there for investors, but with over 9,000 funds to pick from, it's easy to get overwhelmed. So, today, I'm

cutting through the noise and breaking down my top four Fidelity Index funds that can seriously accelerate your path

to financial freedom. Fund number one, Fidelity 500 Index Fund, FXAIX. Let's start with the classic. FXAIX

tracks the S&P 500, meaning you're investing in 500 of the largest publicly traded companies in the US. Think

technology, health care, financials, and more. This is what most people call a core holding, and for good reason. It's

simple, it's diversified, and it has a long track record of solid long-term growth. The expense ratio is just

0.015%. That's 15 cents for every $1,000 invested. Incredibly affordable. The

historical returns speak for themselves. A $10,000 investment in this fund 10 years ago would be worth nearly $35,000

today. Now, it's not perfect. Because it only holds large-cap stocks, you miss out on the higher growth potential of

smaller companies. It's also heavily weighted towards tech, so if that sector takes a hit, you'll feel it. And the

dividend yield sits around 1.42%, which isn't great if income is your priority. But if you're in the wealth-building

phase and want a reliable, low-maintenance investment, FXAIX is hard to beat. Buy it, hold it, and let

time do the heavy lifting. Fund number two, Fidelity Total Market Index Fund, FSKAX.

Next up is the Fidelity Total Market Index Fund, ticker FSKAX, and this one is something special. Where FXAIX gives

you the 500 biggest companies, FSKAX goes much further. This fund aims to replicate the performance of the entire

US stock market. We're talking roughly 3,000 stocks, large-cap, mid-cap, and small-cap companies, all bundled into

one single fund. From Apple and Amazon all the way down to small businesses you've probably never heard of. That

breadth of coverage is what makes FSKAX one of the most comprehensively diversified funds available anywhere. I

actually like to call FSKAX the buy and hold investor's dream fund because it really is a complete one-and-done

solution for someone who wants full exposure to the US market without overthinking it. The expense ratio is

the same as FXAIX, just 0.015% or 15 cents per $1,000, extremely affordable. Now, the returns are

slightly lower than FXAIX over the past decade. The reason for that is simple. Smaller companies have underperformed

the big guys in recent years. $10,000 invested 10 years ago would have grown to around $33,000 today, which is about

1,700 less than FXAIX. But here's the thing, I wouldn't get too hung up on that difference. Past performance

doesn't guarantee future results. History actually shows that small and mid-cap stocks can outperform in certain

market cycles. And since we can't go back and invest in the past, it makes sense to position yourself for the

future. One thing to be aware of, even though FSKAX holds thousands of stocks, it's still primarily driven by large-cap

companies because of how they're weighted. So, don't think of it as a fundamentally different fund from FXAIX.

It's more like FXAIX with added exposure to the rest of the market. The dividend yield is around 1.4%, which is

comparable. One critical point, because FSKAX already contains everything in the S&P 500 and more, there's really no

reason to hold both FXAIX and FSKAX simultaneously. They overlap heavily. Pick one or the other as your core US

equity holding and go from there. Fund number three, Fidelity Total International Index Fund, FTIOX.

All right, fund number three is one that a lot of US investors tend to skip, and I think that's a mistake. This is the

Fidelity Total International Index Fund, ticker FTIOX. This fund is designed to track the

performance of the global stock market outside the United States. It holds over 5,000 stocks from both developed and

emerging markets, places like Europe, Japan, the UK, China, India, Latin America, and more. The idea is to give

you exposure to economic growth happening all around the world, not just in America. The expense ratio is 0.06%,

still extremely low, but slightly higher than our first two funds. That's 60 cents per $1,000 invested. Very

reasonable for the level of global diversification you're getting. Now, I'll be honest with you. Looking at the

raw returns on this fund over the past several years, it's not pretty. $10,000 invested when this fund launched about 8

years ago would have grown to roughly $17,500 today. Compared to our US funds, that's

underwhelming. And if you're asking why I'm still including it on this list, that's a fair question.

Here's the honest answer. No single market leads forever. US stocks, especially large-cap tech, have

absolutely dominated global returns in recent years. But history is full of periods when international markets

outperformed the US. And when that pendulum swings again, you'll want to have some exposure when it does. Missing

out entirely because you were anchored to recent performance is how investors get caught flat-footed. There's also a

valuation angle here. Many international markets are trading at significantly lower valuations compared to US stocks

right now, which could mean better long-term growth potential going forward. And holding both US and

international stocks tends to smooth out volatility because the two markets often move differently under different

economic conditions. The dividend yield on FTIOX is actually quite strong at around 3.18%, which is a nice bonus.

Things to keep in mind. International markets, especially emerging markets, can be more volatile than the US due to

political instability, currency risk, and economic fluctuations. They can also take longer to recover from downturns,

so you need patience with this one. It's a long game. I also want to mention that Fidelity offers two other international

funds, FSGGX and FSPSX, that are slightly cheaper than FTIOX. The reason I still prefer FTIOX is the sheer number

of stocks it holds. More stocks means broader diversification and a better shot at capturing true market returns.

Since the fees are all so low anyway, I'm personally comfortable paying a tiny bit more to get much broader exposure.

But if cost is your primary concern, FSGGX would be my runner-up pick. Fund number four, Fidelity Freedom Index

Funds. And our final category is a little different from the others because it's not just one fund, it's a family of

funds, and the concept behind them is brilliant in its simplicity. I'm talking about the Fidelity Freedom Index Funds,

also known as target date retirement funds. Here's how they work. Each fund is named for a specific retirement year,

going from 2010 all the way out to 2070 in 5-year increments. You pick the fund closest to the year you plan to retire,

invest in it, and the fund automatically does all the heavy lifting for you. As you get closer to retirement, the fund

gradually shifts its asset allocation, moving away from higher risk stocks and toward more conservative bonds and

inflation-protected investments. This strategy is called a glide path, and it's designed to reflect the idea that

you can afford more risk when you're young and have decades ahead of you, but you need more stability as you approach

and enter retirement. Each Freedom Index Fund is made up of other low-cost Fidelity Funds under the hood, which

keeps the overall expense ratio very competitive at just 0.12%. That's $1.20 per $1,000. For a fully

managed, automatically rebalancing, diversified portfolio, that's a genuinely impressive value. To give you

a sense of the returns, let's look at the Freedom Index 2045 Fund as an example. $10,000 invested in that fund

10 years ago would have grown to just over $24,000 today. Solid, if less aggressive than a pure stock fund. Now,

there are a couple of criticisms worth addressing. First, some investors feel that these funds become too conservative

too quickly, meaning they shift into bonds sooner and more heavily than a higher risk-tolerant investor would

want. My personal workaround for that is to always select the furthest out target date fund available. Right now, that's

the 2070 Fund, regardless of when I actually plan to retire. That keeps the allocation more growth-oriented for

longer. Second, these funds are designed for the average investor, which means they may not perfectly fit everyone's

specific goals or financial situation. If, like me, you prefer a 100% stock-heavy portfolio during the

accumulation phase, a target date fund may feel too tame. But, for someone who wants to hand the reins over and just

let the fund do its thing, this is about as close to a perfect set-it-and-forget-it solution as you'll

find. So, there you have it. My top four Fidelity index funds to help you grow your net worth and build lasting

financial freedom. FXAIX for straightforward S&P 500 exposure, FSKAIX for total US market coverage, FTIOX for

global diversification, and the Fidelity Freedom Index Funds for the ultimate hands-off retirement approach. Now, you

might be wondering, "What about those Fidelity zero fee funds? Why didn't those make the list?" I actually cover

that in detail in a separate video, along with my top five investment portfolios to help you build serious

long-term wealth. I'll link both below, so you can check them out next. If you found this video helpful, please hit

that like button. It genuinely makes a difference. And if you're new here and want more straightforward, no-nonsense

content about building wealth and investing wisely, make sure you subscribe. I'll see you in the next one.