Same Fidelity’s Target Date Funds but different name?
Here’s a summary of the main problem and solutions discussed in the conversation:
- Main Problem: The user, AdmiralLevine, is confused about the differences between three Fidelity mutual funds for target date retirement: Fidelity Freedom, Fidelity Managed Retirement, and Fidelity Simplicity RMD.
- Solution 1: Fidelity representatives explained that each fund may have different investment strategies, asset allocations, and management styles, which can affect performance and risk.
- Solution 2: They suggested reviewing the investment objectives, risks, charges, and expenses of each fund by accessing the fund’s prospectus and other documents available online.
- Solution 3: Fidelity also recommended comparing the fund objectives and strategies on each fund’s research page to understand the specific differences among the funds better.
Here’s the full thread
Hello, I noticed that there are 3 different fidelity mutual funds for target date retirement that all seem the same but have different names: fidelity freedom, fidelity managed retirement, and fidelity simplicity RMD. What’s the difference between them, and which one should I choose?
Great question, @AdmiralLevine. We aren’t able to advice you on what to choose, but I’m happy to jump in and share some general information regarding the target date mutual funds that we offer.
When looking across different providers, every target date strategy is different. From investment-related attributes such as the goal of the strategy, to the design and portfolio construction, to fees and expenses. Each of these attributes can result in meaningful differences in the performance and risk of an individual target date portfolio – and ultimately investor outcomes. For example, the asset allocation (i.e. the types of assets the fund invests in, and the % mix in each asset class over time) can vary among providers due to differing views and research inputs. (Some target date funds invest more aggressively than others). Target date funds also are offered in different management styles, for example: active, blend, or index-based approaches. Finally, the performance and cost of a target date strategy can also differ significantly across providers.
Before investing, consider the investment objectives, risks, charges and expenses of the fund or annuity and its investment options. For more information, you can find the fund’s prospectus, reports to shareholders, and other information about the fund (including the fund’s SAI) online at www.fidelity.com/funddocuments. 🟢
I see, so they are just different strategies for the same goal?
Fidelity’s target date funds (TDF) are designed to align with your planned retirement year to give you a complete portfolio in a single investment. Our investment team gradually shifts and regularly rebalances the asset mix of each fund, providing a hassle-free way to invest.
Every fund is different in a variety of ways, including composition, number of holdings and their weights, asset allocation, and country/regional diversification. When comparing funds, you may find it helpful to review both the fund objective and fund strategy on each fund’s research page. This will often highlight the differences between the funds in question. You can find this in the Summary section of the research page under “Fund Overview.” 🟢