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8 Simple Portfolios with Fidelity Funds (and iShares ETFs)

A reader writes in, asking:

“Your page of 8 simple portfolios is great guidance for people who want a simple plan they can institute. I wondered whether that page could offer a list of Fidelity options for some of those portfolios…if they are up-to-snuff enough and low-cost enough.”

The idea of the original “8 simple portfolios” article was to provide a menu of several possible portfolios, sorted by complexity (i.e., a one-fund portfolio, two-fund portfolio, and so on). At the time, I listed Vanguard funds simply because they are my go-to company for index funds.

But, to be clear, Fidelity does have a perfectly good lineup of low-cost index funds. In addition, they offer commission-free trades on a number of iShares ETFs, which can also be used to build a low-cost, diversified, simple portfolio.

Before we get into the portfolios, let me answer a few questions first:

  • As with the previous article, in order to make comparisons easy, each of the portfolios is built using the same overall stock/bond allocation (70/30). There’s no particular reason that a 70/30 split was chosen over any other allocation. Investors with differing levels of risk tolerance would want to adjust as necessary to meet their needs.
  • Each of the portfolios uses a roughly 50/50 domestic/international allocation for the stocks, because that is what I used to use when I had a DIY portfolio. Such an allocation is not going to be a good fit for everybody. Again, adjust as necessary to match your risk tolerance.
  • I’m using the ticker symbols for the “Premium” share class for the Fidelity index funds, but the “Investor” share class versions are perfectly good options if you don’t meet the minimum investment requirement for the Premium versions.
  • With regard to tilting the portfolio toward small-cap stocks and/or value stocks: I have never done this with my own portfolio, but such tilts are one of the more compelling reasons to include several (i.e., more than three or four) funds, so I am assuming that that is the goal of the more complex allocations.

One-Fund Portfolio

I would caution against accidentally buying a “Fidelity Freedom Fund” rather than a “Fidelity Freedom Index Fund.” The non-indexed versions are quite a bit more expensive and include a whole list of bizarre allocations.

Two-Fund Portfolio

  • 70% iShares MSCI All Country World Index ETF (ACWI)
  • 30% Fidelity U.S. Bond Index Fund (FSITX) or iShares Core U.S. Aggregate Bond ETF  (AGG)

Three-Fund Portfolio

  • 35% Fidelity Total Market Index Fund (FSTVX) or iShares Core S&P Total U.S. Stock Market ETF (ITOT)
  • 35% Fidelity Total International Index Fund (FTIPX) or iShares Core MSCI Total International Stock (IXUS)
  • 30% Fidelity U.S. Bond Index Fund (FSITX) or iShares Core U.S. Aggregate Bond ETF (AGG)

Four-Fund Portfolio

  • 30% Fidelity Total Market Index Fund (FSTVX) or iShares Core S&P Total U.S. Stock Market ETF (ITOT)
  • 10% Fidelity Real Estate Index Fund (FSRVX)
  • 30% Fidelity Total International Index Fund (FTIPX) or iShares Core MSCI Total International Stock (IXUS)
  • 30% Fidelity U.S. Bond Index Fund (FSITX) or iShares Core U.S. Aggregate Bond ETF (AGG)

Five-Fund Portfolio

  • 30% Fidelity Total Market Index Fund (FSTVX) or iShares Core S&P Total U.S. Stock Market ETF (ITOT)
  • 10% Fidelity Real Estate Index Fund (FSRVX)
  • 30% Fidelity Total International Index Fund (FTIPX) or iShares Core MSCI Total International Stock (IXUS)
  • 15% Fidelity U.S. Bond Index Fund (FSITX) or iShares Core U.S. Aggregate Bond ETF (AGG)
  • 15% Fidelity Inflation-Protected Bond Index Fund (FSIYX) or iShares TIP Bond ETF (TIP)

Six-Fund Portfolio

  • 20% Fidelity 500 Index Fund (FUSVX) or iShares Core S&P 500 (IVV)
  • 10% iShares S&P Small-Cap 600 Value Index (IJS)
  • 10% Fidelity Real Estate Index Fund (FSRVX)
  • 30% Fidelity Total International Index Fund (FTIPX) or iShares Core MSCI Total International Stock (IXUS)
  • 15% Fidelity U.S. Bond Index Fund (FSITX) or iShares Core U.S. Aggregate Bond ETF (AGG)
  • 15% Fidelity Inflation-Protected Bond Index Fund (FSIYX) or iShares TIP Bond ETF (TIP)

Seven-Fund Portfolio

  • 20% Fidelity 500 Index Fund (FUSVX) or iShares Core S&P 500 (IVV)
  • 10% iShares S&P Small-Cap 600 Value Index (IJS)
  • 10% Fidelity Real Estate Index Fund (FSRVX)
  • 20% Fidelity Total International Index Fund (FTIPX) or iShares Core MSCI Total International Stock (IXUS)
  • 10% iShares MSCI EAFE Small-Cap Index (SCZ)
  • 15% Fidelity U.S. Bond Index Fund (FSITX) or iShares Core U.S. Aggregate Bond ETF (AGG)
  • 15% Fidelity Inflation-Protected Bond Index Fund (FSIYX) or iShares TIP Bond ETF (TIP)

Eight-Fund Portfolio

  • 20% Fidelity 500 Index Fund (FUSVX) or iShares Core S&P 500 (IVV)
  • 10% iShares S&P Small-Cap 600 Value Index (IJS)
  • 10% Fidelity Real Estate Index Fund (FSRVX)
  • 10% Fidelity Total International Index Fund (FTIPX) or iShares Core MSCI Total International Stock (IXUS)
  • 10% iShares MSCI EAFE Small-Cap Index (SCZ)
  • 10% iShares International Select Dividend (IDV)
  • 15% Fidelity U.S. Bond Index Fund (FSITX) or iShares Core U.S. Aggregate Bond ETF (AGG)
  • 15% Fidelity Inflation-Protected Bond Index Fund (FSIYX) or iShares TIP Bond ETF (TIP)

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