Fidelity is expected to get more attention from investors in the coming months on the back of strong performance in the third quarter. The third largest fund family in terms of assets under management is successfully providing investment advice and wealth management services to its clients. Its ability to offer low-cost mutual funds consistently, effective fund management and the capability to survive market volatility have resulted in strong fund performance.
Fidelity Lowers Fund Costs
Fidelity Investments has successfully provided index funds and sector ETFs at a lower cost than one of its immediate competitor, Vanguard. In the third quarter of this year, Fidelity announced that the total expense ratio of 14 of its bond and stock index funds will be reduced. With this announcement, all the 29 Fidelity index funds and sector ETFs are now offered at lower expense ratios than their Vanguard counterparts. According to the senior vice president for Fidelity’s Investment Product Group, Colby Penzone, “index investors focused on cost” should look no “further than Fidelity.”
Moreover, in Kiplinger’s survey of several fund families, Fidelity became one of the Best Online Brokers. Additionally, in Kiplinger’s Personal Finance’s no-load fund list, four out of the 25 funds are from Fidelity. In the U.S. Lipper Fund Awards 2017, 11 Fidelity mutual funds received 14 awards. Out of the 11 Fidelity funds, five U.S. and non-U.S. equity funds received awards. Three sector funds, one bond fund, and one high-income fund also secured awards.
What Boosted Fidelity Fund’s Performance?
Fidelity invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments are made in technology. Among the cyclical sectors, the fund family invests the maximum in the financial sector, while among defensive sectors it invests heavily in healthcare.
Technology Select Sector SPDR (XLK) has climbed 25.4% so far this year and is the biggest gainer among the S&P 500 sectors. Also, the technology mutual fund has registered year-to-date (YTD) returns of 30.9%, according to Morningstar. Also, financial and healthcare mutual funds have registered positive YTD returns of 12.2% and 22.2%, respectively.