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Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 01-16-2007, 04:18 PM   #1
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Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

Seem like everyone in the company put it in this fund? Does that make us crazy or stupid? Can we do better?
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 01-16-2007, 04:53 PM   #2
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

You are in a good fund... Don't fret. They have very good diversification and asset allocation. For a young/younger person you could do so much worse than this fund.

The Fidelity Freedom funds are a great fund to be in. They have (arguably) the best/proper mix of stocks/bonds with (arguably) the best asset allocation amoung large/small and growth/value as well as domestic/international stocks. For the bonds they have a great mix of durations and of risk attributes. The asset allocation and mix will become more conservative as you approach retirement.

If I was to make one complaint about the Freedom funds it would be that the expense ratio is somewhat higher than a comparable Vanguard fund.

However the Freedom funds are miles better than your standard high fee fund that the sharks might sell you.

You can always find another "hot" fund that has outperformed yours. However chasing last years "hot" fund is a game for losers. Don't do it.

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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 01-16-2007, 05:20 PM   #3
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

Good fund. Other options would be Fidelity Balanced or Oakmark Balanced. I have the latter.
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 01-31-2007, 02:26 PM   #4
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

Thank you so much!
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 01-31-2007, 02:30 PM   #5
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

Expense ratio of 0.76%. That's much higher than what I like to pay. Do you have any of the fidelity spartan index funds available? They should have expense ratios of around 0.1%.
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 01-31-2007, 03:17 PM   #6
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

You'll never get small caps and foreign asset exposure with expense ratio's as low as 0.10%.

I would expect an equivalent Vanguard fund to have an expense ratio around 0.40%
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 01-31-2007, 03:39 PM   #7
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

Quote:
Originally Posted by MasterBlaster
You'll never get small caps and foreign asset exposure with expense ratio's as low as 0.10%.

I would expect an equivalent Vanguard fund to have an expense ratio around 0.40%
Vanguard's target retirement funds are ~0.21% with an international allocation.

Masterblaster, I'm not sure if you are limiting your selection of funds to "fidelity funds" or "target retirement" funds, but international exposure is cheap at fidelity at 0.1% for Spartan total international index - FSIIX. Small caps can be had for ~0.2% at VG, and if you can access their Admiral class, you can get small caps for 0.13%.

If the OP is discussing a 401k, which it sounds like, there may be institutional options available from vanguard or elsewhere that give expense ratios of ~0.05%. At least my wife's 401k administered through fidelity has some of these VG institutional funds (VIVIX for example). Of course, if we're talking 401k's, you may have horrible choices versus the Fidelity Freedom fund, and in that case, the Freedom fund may be the clear winner. I still think 0.76% is a steep price to pay for slight diversification benefits, unless your other options are as costly or more expensive. You can always diversify outside of your 401k to arrive at an overall well-diversified portfolio. I do this, since my own fidelity-administered 401k only has two domestic Spartan funds with reasonable costs. I get my international and value tilts elsewhere.
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 01-31-2007, 09:41 PM   #8
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

How about putting 1/2 your money in Fidelity Freedom fund and 1/2 in Vanguard Target Retirement fund? I've been looking at the Freedom 2035 and the Target Retirement 2035....the former has expense ratio of 0.78%, the latter has 0.21%, so a half-and-half should have around 0.5% which I think is acceptable for an overall portfolio.

The Freedom funds are actively managed, the TR funds are passive (index). Supposedly there are times when active funds do better than passive, and vice-versa. Seems like splitting funds between the two wouldn't be a bad idea. Then you have two teams of professionals (Fidelity and Vanguard) with different approaches working for you.

If you have Freedom funds in your 401(k), you could open a Roth IRA at Vanguard for the TR funds.

I think this plan sounds so good that I'm going to do it!
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 02-01-2007, 09:59 AM   #9
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

Quote:
Originally Posted by Dude
I think this plan sounds so good that I'm going to do it!
If you are happy and feel good about it you are all set. You could do a lot worse with a lot of things but the plan you have will get you almost(80-90%) all the returns of a compilcated slice and dice plan

-h
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040
Old 02-01-2007, 11:36 AM   #10
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Re: Can anyone tell me about this fund? FFFFX FIDELITY FREEDOM 2040

Quote:
Originally Posted by MasterBlaster
You'll never get small caps and foreign asset exposure with expense ratio's as low as 0.10%.
Never say never
You can get some small cap exposure through FSEMX with 0.10% ER (it tracks Wilshire 4500, so mostly mid caps with some small caps)
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