The U.S. market remains volatile due to shifting foreign policies and rising geopolitical tensions. Investors are still concerned about the impact of new reciprocal tariff policies on domestic inflation and economic growth. However, in such circumstances, the Federal Reserve is less likely to lower interest rates soon. Contrary to the Fed’s opinion, President Trump wants immediate monetary policy easing to save the economy from slipping into a recession.

The Personal Consumption Expenditure (PCE) index remained flat in March with the consensus estimate of 0.1%.  Personal consumption and personal income grew by 0.7% and 0.5% respectively in March compared to street expectations of 0.5% and 0.4%. According to the report published by the University of Michigan, the consumer sentiment index for the month of April came in at 52.2 down sharply from 57.0 in March, marking the lowest since July 2022. The consumer confidence index reported by the Conference Board fell to 86 in April from 92.9 in March. The Gross Domestic Product (GDP) contracted at a 0.3% annualized rate in Q1 2025 compared with 2.4% in the last quarter of 2024. The Department of Labor said in its Job Openings and Labor Turnover Survey (JOLTS) report that job openings fell sharply by 288,000 in March to 7.192 million.

Amid such uncertain market conditions, mutual fund investing can help those who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds. Fidelity mutual funds like Fidelity Select Insurance Portfolio (FSPCX Quick QuoteFSPCX - Free Report) , Fidelity Advisor Semiconductors (FELIX Quick QuoteFELIX - Free Report) , Fidelity Contrafund (FCNKX Quick QuoteFCNKX - Free Report) , Fidelity Select Defense & Aerospace (FSDAX Quick QuoteFSDAX - Free Report)  and Fidelity Large Cap Stock (FCLKX Quick QuoteFCLKX - Free Report)  should be good choices since they provide low-cost and uncomplicated equity funds that can help investors meet their goals.

These funds have wide exposure in industries like finance, industrial cyclical, utilities, technology and energy. These have not only preserved investors’ wealth but also generated excellent returns.

Why Invest in Fidelity Mutual Funds?

Fidelity mutual funds would be a compelling choice for investors. This is because Fidelity mutual funds have given positive returns in the past and are expected to perform well in the long run.

Headquartered in Boston, MA, Fidelity Investment is one of the oldest and most trusted mutual fund companies in the world. The company was founded in 1946 and had 51.5 million individual investors and $15.1 trillion of assets under administration as of Dec. 31, 2024.

Fidelity Investment has more than 770,00 associates in 11 countries across North America, Europe, Asia and Australia to carry out extensive and in-depth research and provide potential investment avenues worldwide to their clients.

The company provides best-in-class financial planning, advisory services, retirement planning wealth management, brokerage services to its clients. Thus, investors who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds can choose Fidelity mutual funds. Fidelity Investment sells its mutual fund products directly to its clients, which results in a zero-load charge.

We have thus selected five Fidelity mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, and minimum initial investments within $5000. The funds carry an expense ratio of less than 1%. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Fidelity Select Insurance Portfolio fund invests most of its net assets in common stocks of domestic and foreign companies that areengaged in underwriting, reinsuring, selling, distributing, or placing property and casualty, life, or health insurance. FSPCX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.

Fahim Razzaque has been the lead manager of FSPCX since July 13, 2022. Most of the fund’s exposure was in companies like Chubb (10.8%), AON (8.1%) and Arthur J. Gallagher (8.1%) as of Nov. 30, 2024.

FSPCX’sthree-year and five-year annualized returns of 16.6% and 25.2%, respectively. FSPCX has an annual expense ratio of 0.70%.

To see how this fund performed compared to its category and other 1, 2, and 3 Ranked Mutual Funds, please click here.

Fidelity Advisor Semiconductors fund invests most of its net assets in common stocks of domestic and foreign companies that areprincipally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FELIX chooses to invest in stocks based on fundamental analysis factors such as each issuer's financial condition, industry position, and market and economic conditions.

Adam Benjamin has been the lead manager of FELIX since March 15, 2020. Most of the fund’s exposure was in companies like NVIDIA (22.2%), Broadcom (12.4%) and Marvell Technology (7.5%) as of Jan. 31, 2025.

FELIX’s three-year and five-year annualized returns are nearly 15.4% and 30.8%, respectively. FELIX has an annual expense ratio of 0.69%.

Fidelity Contrafund invests the majority of its net assets in the common stocks of domestic and foreign companies with either growth or value or both characteristics. FCNKX advisors invest in stocks based on fundamental analysis factors such as each issuer's financial condition, industry position, and market and economic conditions.

William Danoff has been the lead manager of FCNKX since Sept. 17, 1990. Most of the fund’s exposure was in companies like Meta Platforms (15.8%), NVIDIA (8.5%) and Berkshire Hathaway (8.4%) as of Dec. 31, 2024.

FCNKX has three-year and five-year annualized returns of 13.1% and 20.1%, respectively. FCNKX has an annual expense ratio of 0.56%.

Fidelity Select Defense & Aerospace fund invests most of its net assets in common stocks of domestic and foreign companies that are engaged in the research, manufacture, or sale of products or services related to the defense or aerospace industries. FSDAX advisors generally choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.

Clayton Pfannenstiel has been the lead manager of FSDAX since Dec 27, 2021. Most of the fund’s exposure was in companies like GE Aerospace (18.5%), The Boeing Company(10.2%) and Lockheed Martin (6.8%) as of Nov. 30, 2024.

FSDAX’s three-year and five-year annualized returns are 13.1% and 17.3%, respectively. FSDAX has an annual expense ratio of 0.66%.

Fidelity Large Cap Stock invests most of its net assets in common stocks of large market capitalization companies with market capitalization similar to the companies listed on the Russell 1000 Index or the S&P 500 Index. FCLKX advisors generally invest in issues of both domestic and foreign companies.

Matthew W. Fruhan has been the lead manager of FCLKX since May 25, 2017. Most of the fund’s exposure was in companies like Microsoft (6.2%), Wells Fargo (5.8%) and NVIDIA (5.1%) as of Oct. 31, 2024.

FCLKX’s three-year and five-year annualized returns are 13% and 21.4%, respectively. FCLKX has an annual expense ratio of 0.45%.

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