Fidelity 2040

[FreeAsTheBreeze]

I'd appreciate your thoughts on this fund. Thank you.

 

[MBSC]

Which version? There are two. FFFFX with a 0.77% ER and FBIFX with a 0.16% ER.

Target Date 2040 Fund Returns

Edit to add: I forgot FFKFX (0.67% ER).

 

[ziggy29]

Which version? There are two. FFFFX with a 0.77% ER and FBIFX with a 0.16% ER.

Yep. The former uses some Fidelity managed funds in its allocation; the latter uses only index funds. If you are a Fidelity investor looking for a single asset allocation index fund, a 0.16% ER is worth considering. You can probably do a little better elsewhere, but you are talking about only a few basis points.

 

[FreeAsTheBreeze]

FFFFX is the fund I have.

 

[Senator]

Assuming you have until 2040 to retire, which is 24 years, I would just go with IVV.

IVV has a MUCH lower expense ratio, only .07% vs .77%. IVV has a higher dividend yield, 2.25% vs. 1.47%. The risk, i.e. beta, is similar.

IVV has returned more than FFFFX. I would suspect that after tax gains, since there is little capital gains tax if you hold it, would be less too.

Stay away from mutual funds. They are too expensive.

 

[MBSC]

If it's a 401k with limited choices, then FFFFX is okay. If it is a Fidelity administered 401k, some offer expanded choices through Fidelity BrokerageLink. This gives you additional options and you could probably build your own three fund portfolio at a lower ER.

There are better Target Date funds. From the link in my previous post, click on the 5-year column to sort the funds by their average annual 5-year after expense returns. T Rowe Price (TRRDX), Schwab (SWERX), and Vanguard (VFORX) have Target Date 2040 funds with better after expense returns than any of the Fidelity options.

Outside a 401k, you could also build your own three fund portfolio at a lower ER.

 

[FreeAsTheBreeze]

Thanks for the help. There's not much in the fund (25,000) but I definitely need to look for something with less expenses.

 

[segfault]

Is this a 401k? What options are available?