FFNOX
Fidelity Multi-Asset Index Fd
Strategic Asset Allocation for High Total Return
The Fidelity Multi-Asset Index Fund (FFNOX) stands out for its strategic asset allocation aimed at achieving high total returns. By investing approximately 55% of its assets in the Spartan 500 Index, 15% in the Spartan Extended Market Index Fund, 15% in the Spartan International Index Fund, and 15% in the Fidelity U.S. Bond Index Fund, the fund offers a balanced yet aggressive approach. This allocation strategy allows investors to benefit from the growth potential of equities while maintaining a degree of stability through bond investments. Managed by Fidelity Investments, a leader in the financial services industry, FFNOX leverages the expertise and resources of a well-established firm. The fund’s diversified approach not only seeks to capitalize on domestic and international equity markets but also provides exposure to fixed income, making it a compelling choice for investors seeking a comprehensive investment solution.
At A Glance
Executive Summary
Fidelity Multi-Asset Index Fund (FFNOX) offers diversified exposure with a low expense ratio, aiming for high total returns through strategic asset allocation.
– Low expense ratio of 0.11% enhances net returns. – Diversified asset allocation across equities and bonds. – Strong 1-year return of 27.55%. – Managed by Fidelity, a reputable investment firm.
– Negative alpha and Sharpe ratio indicate underperformance relative to risk. – High correlation with benchmark may limit diversification benefits. – Max drawdown of -6.6% suggests potential volatility.
Performance Highlights: A Year of Impressive Returns
The Fidelity Multi-Asset Index Fund has demonstrated impressive performance, particularly over the past year, with a return of 27.55%. This performance is noteworthy when compared to its benchmark, the S&P 500 Total Return Index, which posted a 1-year return of 38.80%. While the fund’s return slightly lags behind the benchmark, it remains competitive within its category, especially considering its balanced aggressive strategy. Over a ten-year period, the fund has achieved an annualized return of 8.94%, showcasing its ability to deliver consistent growth over the long term. The fund’s performance is driven by its strategic allocation across various asset classes, allowing it to capture gains in both equity and bond markets. This diversified approach has enabled the fund to navigate different market conditions effectively, providing investors with a reliable option for achieving their financial goals.
Navigating Risk: Understanding the Fund’s Risk Profile
The risk profile of the Fidelity Multi-Asset Index Fund is characterized by a beta of 0.80, indicating lower volatility compared to the market. However, the fund’s negative alpha of -11.30% and Sharpe ratio of -1.08 suggest that it has underperformed relative to its risk level. The fund’s standard deviation of 3.01% reflects moderate volatility, while its R-squared value of 90.99% indicates a high correlation with its benchmark. Despite these risk metrics, the fund’s downside risk (UI) of 1.60 and max drawdown of -6.6% highlight its ability to manage losses during market downturns. The fund’s risk management strategy involves a diversified asset allocation, which helps mitigate potential losses while providing opportunities for growth. Investors should consider their risk tolerance and investment objectives when evaluating this fund, as its balanced aggressive approach may not be suitable for all risk profiles.
Portfolio Composition: A Diverse Mix of Holdings
The Fidelity Multi-Asset Index Fund’s portfolio is composed of a diverse mix of holdings, reflecting its strategic allocation across various asset classes. The fund’s top holdings include the Fidelity 500 Index (FXAIX) at 41.09%, Fidelity International Index (FSPSX) at 23.73%, and Fidelity Emerging Markets Index (FPADX) at 10.34%. This allocation provides significant exposure to large-cap U.S. equities, international markets, and emerging economies, offering a well-rounded investment approach. Additionally, the fund allocates 6.91% to the Fidelity U.S. Bond Index (FXNAX), providing a stable income component. The sector allocation is also diverse, with significant investments in technology (23.69%), financials (16.35%), and healthcare (11.83%). This strategic composition allows the fund to capitalize on growth opportunities across different sectors and regions, while maintaining a level of stability through its bond holdings. The fund’s ability to adjust its portfolio in response to market conditions further enhances its appeal to investors seeking a dynamic investment strategy.
Income Strategy: Balancing Yield and Growth
The Fidelity Multi-Asset Index Fund offers a yield of 1.83%, which is competitive within its category and attractive for income-focused investors. This yield is achieved through a strategic mix of equity and bond investments, allowing the fund to generate income while pursuing growth opportunities. Compared to similar funds, FFNOX’s yield is slightly higher than the Fidelity Puritan (FPURX) at 1.69% and the Franklin Growth Allocation-A (FGTIX) at 1.26%, making it a compelling choice for those seeking a balance between income and growth. The fund’s income strategy is designed to provide a steady stream of returns, appealing to investors who prioritize income generation without sacrificing the potential for capital appreciation. This approach makes the fund suitable for a wide range of investors, from those seeking regular income to those focused on long-term growth.
Cost Efficiency: Low Expense Ratio Enhances Returns
The Fidelity Multi-Asset Index Fund boasts a remarkably low expense ratio of 0.11%, which is significantly below the average for balanced aggressive funds. This cost efficiency is a key advantage, as it allows investors to retain more of their returns over time. By minimizing expenses, the fund enhances its net performance, making it an attractive option for cost-conscious investors. When compared to similar funds, such as the Fidelity Puritan (FPURX) with an expense ratio of 0.47% and the Franklin Growth Allocation-A (FGTIX) at 0.85%, FFNOX stands out for its cost-effectiveness. This low expense ratio is a testament to Fidelity’s commitment to providing value to its investors, ensuring that they can achieve their financial goals without incurring excessive fees. The fund’s cost structure is particularly appealing to long-term investors who understand the impact of expenses on overall returns.
Peer Comparison: Standing Out in a Competitive Landscape
In the competitive landscape of balanced aggressive funds, the Fidelity Multi-Asset Index Fund distinguishes itself through its strategic asset allocation and cost efficiency. Compared to similar funds like the Fidelity Puritan (FPURX) and American Funds Growth and Income-R5 (RGNFX), FFNOX offers a unique blend of equity and bond exposure, providing a balanced approach to growth and income. While its 1-year return of 27.55% is slightly lower than some peers, its low expense ratio of 0.11% enhances its appeal by maximizing net returns. The fund’s diversified holdings and strategic sector allocation further differentiate it from competitors, offering investors a comprehensive investment solution. This combination of performance, cost efficiency, and diversification makes FFNOX a strong contender for investors seeking a balanced aggressive fund that can navigate various market conditions effectively.
Future Outlook
The Fidelity Multi-Asset Index Fund’s future performance may benefit from continued economic growth and market stability. Its diversified allocation positions it well for various market conditions, making it advantageous during periods of equity market expansion and interest rate stability.
Investor Suitability: Tailored for Growth-Focused Investors
The Fidelity Multi-Asset Index Fund is well-suited for investors with a growth-focused mindset who are comfortable with a balanced aggressive approach. Its strategic asset allocation across equities and bonds provides a blend of growth potential and income generation, appealing to those seeking a comprehensive investment solution. The fund’s low expense ratio and competitive yield make it an attractive option for cost-conscious investors who prioritize long-term returns. Ideal for investors with a moderate to high risk tolerance, FFNOX offers exposure to both domestic and international markets, allowing for diversification and potential capital appreciation. This fund is particularly appealing to those who value Fidelity’s expertise and resources, as well as its commitment to delivering value through cost-effective investment solutions. Whether for long-term growth or income generation, FFNOX provides a versatile option for a wide range of investors.
Current Market Context: Navigating Economic Uncertainty
In the current market environment, characterized by economic uncertainty and fluctuating interest rates, the Fidelity Multi-Asset Index Fund’s diversified approach offers a strategic advantage. The fund’s allocation to both equities and bonds allows it to navigate varying market conditions, providing stability during periods of volatility. With sectors like technology and healthcare poised for growth, the fund’s exposure to these areas positions it well for potential gains. Additionally, the fund’s bond allocation offers a hedge against interest rate fluctuations, providing a buffer during periods of economic instability. Investors should consider the potential tax implications of the fund’s income strategy, as well as the impact of interest rate changes on bond performance. Overall, the fund’s balanced aggressive approach makes it a resilient choice in today’s complex market landscape, offering opportunities for growth while managing risk effectively.
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