• Print
  • Default text size A
  • Larger text size A
  • Largest text size A

Index Funds

Index funds attempt to track the performance of a particular stock or bond index, such as the S&P 500® Index or the Barclays U.S. Aggregate Bond Index, by holding most or all of the securities that are included in that index.

Reasons to consider index funds

  • Generally lower management fees
  • Potentially more tax-efficient
  • Reduced portfolio turnover

For the most part, index funds do not attempt to outperform their benchmark, but rather match the benchmark's performance. Index funds generally have a lower fee structure than actively managed funds, because they're not as costly to manage.

Why Fidelity for index funds

Types of index funds

Domestic stock

These funds seek to mimic the performance of a major U.S. equity index, such as the S&P 500 or the Russell 2000 indexes.

International stock

These funds seek to track the performance of well known international equity indexes, such as the FTSE Emerging Index or the MSCI EAFE Index.

Bond

These funds seek to mirror the performance of an index such as the Barclays U.S. Aggregate Bond Index or the Barclays U.S. 1–5 Year Treasury Bond Index.

Asset allocation

Asset allocation index funds contain a professionally managed diversified portfolio consisting entirely of index funds. Learn more about the Fidelity Four-in-One Index Fund.

Focus is on tooltip

Standard & Poor's 500 Index (S&P 500®)

S&P 500 Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.

Focus is on tooltip

Barclays 1–5 Year U.S. Government Bond Index

Barclays U.S. 1–5 Year Government Bond Index is a market value–weighted index of U.S. Government fixed–rate debt issues with maturities between one and five years.

Focus is on tooltip

Barclays U.S. Aggregate Bond Index

Barclays U.S. Aggregate Bond Index is a broad-based, market-value-weighted benchmark that measures the performance of the U.S.dollar-denominated, investment-grade, fixed-rate, taxable bond market. Sectors in the index include Treasuries, government-related and corporate securities, mortgage-backed securities (MBS) – agency fixed-rate and hybrid ARM pass-throughs -asset-backed securities (ABS), and commercial mortgage-backed securities (CMBS).

Focus is on tooltip

FTSE Emerging Index

FTSE Emerging Index is a market capitalization-weighted index designed to measure the performance of large and medium capitalization companies domiciled in emerging market countries across the world.

Focus is on tooltip

MSCI EAFE Index

MSCI EAFE (Europe, Australasia, Far East) Index is a market capitalization-weighted index that is designed to measure the investable equity market performance of value stocks for global investors in developed markets, excluding the U.S. and Canada.

Focus is on tooltip

Russell 2000 Growth Index

The Russell 2000 Growth Index is an unmanaged index that measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.

Questions?

  • Exchange-Traded Funds (ETFs)

    ETFs are structured similarly to mutual funds except they can be bought and sold throughout the trading day. Many ETFs are passively managed like index funds.*

  • Enhanced Index Funds

    Fidelity’s enhanced index funds attempt to bridge the gap between passive and active management by employing a model-based investment management approach that moderately seeks to outperform a fund’s respective index.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information.  Read it carefully.

Indexes are unmanaged. It is not possible to invest directly in an index.

Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.

Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets. These risks are particularly significant for funds that focus on a single country or region.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.)  Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

* ETFs may trade at a discount to their NAV and are subject to the market fluctuations of their underlying investments. ETFs are subject to management fees and other expenses.
607754.1.5