3 Fidelity Funds Rated 5 Stars by Morningstar

Fidelity Investments is the nation’s fourth-largest mutual fund manager with more than $4.3 trillion in assets under management, as of March 31, 2022, the most recent information available. Fidelity serves 40 million individual investors through more than 500 mutual funds and ETFs.

A fund’s quality can be approximated using Morningstar’s star ratings, which range from 1 star (lowest quality) to 5 stars (highest). Star ratings are ranked on a curve; the top 10% of funds receive five stars, the next 22.5% receive four stars, the middle 35% receive three stars, the next 22.5% receive two stars, and the bottom 10% receive one star. Here’s a look at three of Fidelity’s funds that are rated 5 stars by Morningstar. All information is accurate as of Q2 2022.

Balanced Loyalty (FBALX)

Fidelity Balanced Fund (FBALX) invests in a combination of stocks, bonds and cash. Balanced funds are often a good option for investors who wish to have a smaller number of funds, and therefore like the somewhat “all-in-one” approach that a balanced fund offers, or who want a fund that can represent a base on which they can build the rest of their portfolio.

Fidelity Balanced falls in the middle in terms of risk. It is riskier than a pure bond fund, but not as risky as a pure equity fund. It is considered a moderate allocation fund, which means that it offers a medium-risk asset allocation consisting of around two-thirds stocks and one-third bonds.

Since the fund’s inception in 1986, this $41 billion AUM, 5-star fund has posted an average return of approximately 9.34% through Q2 2022. The expense ratio for FBALX is 0.51% and it has a relatively high turnover rate of 0.40, but there is no minimum initial investment amount.

Fidelity Capital & Income (FAGIX)

Fidelity Capital & Income Fund (FAGIX) is another 5-star balanced fund that is much more bond-oriented, with around 75% of the portfolio weighted in a bond allocation. The fund offers a good combination of growth and income. The market risk is higher than that of a pure bond fund but lower than that of a pure equity fund. Long-term returns are higher than those of most bond funds.

The expense ratio for FAGIX is 0.67% with no minimum investment amount. The fund has returned an average annualized rate of 9.41% through the second quarter of 2022.

Fidelity Blue Chip Growth (FBGRX)

A third 5-star Fidelity fund is the Fidelity Blue Chip Growth Fund (FBGRX), a good choice for investors who want exposure to mature, large-cap stocks. FBGRX invests at least 80% in blue chip large cap stocks and the balance in large cap growth opportunities. That gives it a touch of active management on something like the S&P 500 index.

The expense ratio for FBGRX is 0.79% with no minimum investment and a turnover ratio of 0.41. The fund has returned 12.2% per year, on average, since its inception.