The Fastest Way to Double $1 Million with Fidelity Index Funds (Fidelity Investments)

About this video

• Video Title: The Fastest Way to Double $1 Million with Fidelity Index Funds (Fidelity Investments)
• Channel: Investment Research 🅥;
• Speakers: Simo
• Duration: 11:15

Overview

This video analyzes five Fidelity index funds to determine the fastest and most efficient way for a hypothetical investor with $1 million to double their capital, specifically to fund a $1 million home purchase using only the investment growth. The analysis considers factors like growth potential, dividend yield, and sector exposure, and projects the time it would take for each fund to double the initial capital.

Key takeaways

• Objective: To double $1 million in capital using only investment growth, allowing the principal to remain untouched and compound.
• Fund Analysis: Five Fidelity index funds were analyzed, ranked from most conservative to fastest for capital appreciation.
• Fund #5: Fidelity Freedom Index Fund (FDKLX): A target-date fund for retirement around 2060. It's diversified but includes bonds, which act as a drag on growth. Projected to take 9 years to double capital.
• Fund #4: Fidelity Zero Large Cap Index Fund (FNILX): Tracks the largest US companies with a 0% expense ratio. Offers strong growth and a reasonable dividend yield. Projected to take 7 years to double capital.
• Fund #3: Fidelity 500 Index Fund (FXAIX): A classic S&P 500 tracker, representing the 500 largest US companies. Offers consistent broad market compounding. Projected to take 6 years to double capital.
• Fund #2: Fidelity US Sustainability Index Fund (FITLX): Focuses on modern growth leaders in sectors like software and clean technology. Features strong capital gains and high dividend growth. Projected to take 5 years to double capital.
• Fund #1: Fidelity NASDAQ Composite Index Fund (FNCMX): A pure play on the innovation economy, heavily weighted in technology. Offers the highest historical growth but comes with significant volatility and concentration risk. Projected to take 4 years to double capital.
• Optimal Strategy: The video suggests a blend of efficiency and stability for most investors, highlighting the Fidelity 500 Index Fund (FXAIX) and the Fidelity US Sustainability Index Fund (FITLX) as a strategic sweet spot. FITLX is recommended as the top pick for those prioritizing speed without extreme concentration risk.