What If You Invest 100k in the BEST 5 Fidelity Index Funds

Summary

In this video, discover the top five Fidelity index funds to invest $100,000 for long-term growth. From defensive staples like FSTA to innovative tech giants in FTEC, these funds offer diverse strategies, focusing on growth, stability, and dividend potential. Learn how each fund's historical performance could turn your $100,000 into millions over 30 years, with some providing dividends of up to $20,000 annually. Whether you're seeking security or explosive growth, this guide helps you make informed decisions on where to park your capital and watch it multiply.

Takeaways

• 😀 Investing $100,000 in index funds can lead to significant long-term returns without the need for active stock management.
• 😀 Fidelity index funds are selected based on growth potential, dividend yield, sector performance, and long-term stability.
• 😀 The top 5 Fidelity index funds discussed offer diverse strategies ranging from stability to explosive growth.
• 😀 The Fidelity MSCI Consumer Staples Index ETF (FST) provides stability and is a solid choice for conservative investors, with a 10-year dividend CAGR of 10.7%.
• 😀 FST’s top holdings include Procter & Gamble, Costco, Walmart, and Coca-Cola, making it a reliable income generator with a current dividend yield of 2.39%.
• 😀 The Fidelity MSCI Consumer Discretionary Index ETF (FDIS) targets growth in non-essential goods and services, with a 10-year average return of 16%.
• 😀 FDIS is more focused on growth than dividends, but it has an impressive 10-year dividend CAGR of 11.22%.
• 😀 The Fidelity MSCI Healthcare Index ETF (FHLC) is ideal for conservative investors looking for stability, with a 10-year dividend CAGR of 16.8%.
• 😀 The Fidelity NASDAQ Composite Index ETF (ONQ) focuses on technology and growth-oriented stocks, providing exposure to innovative companies like Apple and Microsoft.
• 😀 The Fidelity MSCI Information Technology Index ETF (FTEC) is a top pick for tech enthusiasts, offering the highest potential return with a 10-year annual return of 18.67%.

Q & A

What are the five Fidelity index funds discussed in the video?

The five Fidelity index funds discussed are: Fidelity MSCI Consumer Staples Index ETF (FST), Fidelity MSCI Consumer Discretionary Index ETF (FDIS), Fidelity MSCI Healthcare Index ETF (FHLC), Fidelity NASDAQ Composite Index ETF (ONQ), and Fidelity MSCI Information Technology Index ETF (FTEC).

What are the key criteria used to select these index funds?

The key criteria for selecting these funds include growth potential, dividend yield, sector performance, and long-term stability.

What makes the Fidelity MSCI Consumer Staples Index ETF (FST) a solid investment choice?

FST is considered a solid investment due to its focus on consumer defensive stocks, such as Procter & Gamble, Costco, and Walmart, which provide essential goods and services. The fund offers stability, a reliable dividend yield of 2.39%, and has demonstrated consistent growth over time.

How does the performance of FST compare to the S&P 500 during economic downturns?

During the 2008 financial crisis, FST only fell by 15%, while the S&P 500 dropped by over 38%. This demonstrates FST's defensive nature and ability to weather economic downturns better than broader markets.

What can John expect if he invests $100,000 in the Fidelity MSCI Consumer Staples Index ETF (FST)?

If John invests $100,000 in FST, he could see his investment grow to $118,800 after one year, $243,700 after 10 years, $681,000 after 20 years, and $2.34 million after 30 years. He could also earn annual dividends of about $165,400 by year 30.

What distinguishes the Fidelity MSCI Consumer Discretionary Index ETF (FDIS) from the Fidelity MSCI Consumer Staples Index ETF (FST)?

FDIS focuses on consumer discretionary stocks, which are non-essential goods and services, like luxury goods and entertainment. Unlike FST, which focuses on essentials, FDIS is geared toward growth and innovation and benefits from a booming economy.

How does FDIS compare in terms of growth potential and dividend yield?

FDIS offers strong growth potential, particularly through companies like Amazon, Tesla, and Home Depot. However, its dividend yield is modest at 0.76%, but its 10-year dividend CAGR of 11.22% indicates growing payouts. The fund has historically outperformed the S&P 500 during periods of economic expansion.

What is the projected growth of John's $100,000 investment in FDIS over the long term?

If John invests $100,000 in FDIS, his investment could grow to $315,900 after 10 years, $995,000 after 20 years, and $3.13 million after 30 years. By year 30, John could also earn around $20,000 in annual dividends.

Why is the Fidelity MSCI Healthcare Index ETF (FHLC) considered a stable choice for long-term investors?

FHLC is focused on the healthcare sector, which remains in demand regardless of economic cycles. The fund’s defensive nature was demonstrated in the 2008 financial crisis when it fell by only 22%, making it an attractive option for investors looking for stability and growth.

What are the key holdings in the Fidelity MSCI Healthcare Index ETF (FHLC)?

The key holdings in FHLC include Eli Lilly, UnitedHealth Group, and Johnson & Johnson, which together make up over 25% of the fund.

What would be the potential return for John if he invests in the Fidelity MSCI Healthcare Index ETF (FHLC)?

If John invests $100,000 in FHLC, his investment could grow to $283,300 after 10 years, $931,000 after 20 years, and approximately $3.96 million after 30 years. By year 30, John could receive annual dividends of $33,500.

How does the Fidelity NASDAQ Composite Index ETF (ONQ) stand out from the other funds discussed?

ONQ tracks the NASDAQ Composite Index, which includes some of the most innovative and fastest-growing companies, particularly in the tech sector. It has historically outperformed other indices, offering significant growth potential, especially during technological advancements.

What are the expected returns for John if he invests in the Fidelity NASDAQ Composite Index ETF (ONQ)?

John's $100,000 investment in ONQ could grow to $401,500 after 10 years, $1.57 million after 20 years, and $6.13 million after 30 years. By year 30, John could earn around $4,063 in annual dividends.

What makes the Fidelity MSCI Information Technology Index ETF (FTEC) the top pick among the five funds?

FTEC is the top pick for tech enthusiasts, providing concentrated exposure to the information technology sector. With holdings in companies like Apple, Microsoft, and Nvidia, FTEC captures the explosive growth potential of the tech industry. It also offers impressive dividend growth with a 10-year CAGR of 19.08%.

What would the projected growth of John's $100,000 investment be in FTEC over the next 30 years?

If John invests $100,000 in FTEC, his investment could grow to $119,933 after one year, $586,500 after 10 years, $1.57 million after 20 years, and $6.13 million after 30 years. By then, John could also earn around $151,440 in annual dividends.

What is the significance of FTEC's 10-year dividend CAGR of 19.08%?

The 10-year dividend CAGR of 19.08% indicates that the dividend payouts for FTEC have been growing rapidly. This suggests that the underlying companies are reinvesting profits into growth initiatives, which in turn rewards shareholders with growing dividends.