While we have been critical of target date funds, one plain vanilla offering from Fidelity delivers diversification in one shot. The Four-in-One Index (MUTF:FFNOX) gives investors exposure to domestic and foreign equities, plus bonds. The investment method is simple and straight forward: FFNOX holds four Fidelity index funds. As of March 31, 48.5 percent of assets were in Spartan 500 Index (MUTF:FUSEX) and 12 percent in Spartan Extended Market (MUTF:FSEMX), for 60.5 percent in domestic equities. Another 25 percent was in Spartan International Index (MUTF:FSIIX) for a total equity exposure of about 85 percent. Finally, 14.5 percent of assets were in Spartan U.S. Bond Index (MUTF:FBIDX).
Fidelity's method is straight forward, but a bit aggressive for older investors. With only 15 percent in bonds, the fund will track with equities and that means greater volatility. Costs are low though, and the transparent approach makes it easy for investors to consider any correlation with existing holdings. For investors looking for a simple approach, Fidelity Four-in-One is worth a look.
FFNOX earned a 4-star rating from Morningstar as well as a Silver ranking.
FFNOX has a Buy rating in the Fidelity Independent Adviser Newsletter and a Power Index Rating of 88. If you would like more information on this unique proprietary rating system we employ in our newsletter, please call us at (800) 548-3797 and we would be happy to speak with you.
Historical Performance (as of 5/15/13)
|YTD||1 year||3 years*||5 years*|
|+/- Morningstar Mod Target||4.31||6.65||2.95||-0.76|
|+/- Category (NYSE:AL)||1.41||3.25||2.19||0.96|
*3 and 5 Year Returns are annualized. Past performance is no assurance of future results.
Top Ten Holdings (as of 3/31/13)
Top 10 holdings account for 100% of assets.
|Spartan 500 Index|
|Spartan Extended Market Index|
|Spartan International Index|
|Spartan U.S. Bond Index|
Operations and Expenses
FFNOX has an annual holdings turnover of 13%. It has a no load, a low balance fee of $12 for balances under $2,000 if no investment plan is in place, and an expense ratio of 0.22%. The minimum initial investment for individuals is $2,500.
FFNOX has been managed by Chris Sharpe since June 2009 and Andrew Dierdorf since January 2009. Chris earned his BA from Brown University and Andrew earned his BS from the University of Delaware.
Fidelity Independent Adviser's Power Rankings
Power Index: 88
Power Trend: Positive
(Sources: Morningstar, Fidelity.com)
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: No representation is made that any account will or is likely to achieve profits or losses similar to those shown, and there are frequently significant differences between hypothetical performance results subsequently achieved by following a particular strategy. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. All investments involve risk including loss of principal. Please read all disclosures before investing.