A core position in a Fidelity account is an investment that typically has a long-term horizon and serves as the foundation of a portfolio. Core positions are typically held through tax-advantaged accounts, such as 401(k)s or individual retirement accounts (IRAs). These are relatively stable investments, such as stocks and bonds, and can be used to generate long-term capital appreciation or provide a steady and predictable income stream. They may also be used to hedge against riskier investments, such as commodities or currencies, or provide diversity and security in a portfolio. Core positions should be chosen with careful consideration of the investor’s current financial situation, goals, and risk tolerance. Additionally, core positions can include mutual funds, ETFs, index funds, and other investment vehicles.
In addition, Fidelity offers in-depth research and analysis tools to help investors make informed decisions about their core positions. Investors can also use Fidelity’s Portfolio Advisory Services for help in selecting appropriate investments for their core positions. In general, there are 3 core positions that an investor must be aware of, keep on reading to know about it!
Core position options available:
SPAXX:
SPAXX is known as a money market fund, which represents a broad range of holdings that are intended to meet most core investor objectives. This offering provides exposure to a wide range of well-known, low-cost mutual funds and ETFs from multiple asset classes along with high-interest rates. This can include options such as U.S. and/or international stocks, corporate bonds, government bonds, Treasury securities, commodities, and real estate investment trusts (REITs). Additionally, the investment mix is tailored to the investor’s objectives from low risk to high risk to create a portfolio with the most appropriate balance of growth and income generation.
FDIC:
FDIC insurance offers protection against losses due to the failure of FDIC-insured institutions such as banks and savings & loan companies. All Fidelity customers benefit from the FDIC insurance, as Fidelity’s broker-dealer and custodian, National Financial Services LLC (NFS), is an FDIC-insured institution. The FDIC is the U.S. government agency that administers the FDIC insurance program. It is important to understand how the program works in order to be adequately protected from banking and lending institution failures. FDIC insurance provides coverage for principal and accrued interest on financial accounts held in a single banking or savings & loan institution
FDRXX:
FDRXX is a Fidelity money market fund. It is a mutual fund that is managed by Fidelity Investments and invests primarily in short-term, high-quality debt instruments with maturities of one year or less. This money market fund invests in marketable debt securities, such as U.S. Treasury bills and certificates of deposit, with time to maturity of up to one year. FDRXX is designed to provide a safe, liquid investment option for investors.
Which is best, SPAXX or FDIC or FDRXX?
SPAXX and FDRXX are the two most popular choices for investing in stocks, bonds, and other investments.
- FDIC (or Federal Deposit Insurance Corporation) is an independent agency of the US government that provides deposit insurance for customer deposits at banks and other financial institutions. FDIC does not provide investment advice, and should not be used for investment decisions.
- SPAXX is a mutual fund offered by the State Street Global Advisors (SSGA). It is an index fund of 500 stocks that tracks the performance of the S&P 500, providing investors with a low-cost, diversified way to access the U.S. stock market. SPAXX has lower expense ratios than most actively-managed funds.
- FDRXX is a mutual fund offered by the Fidelity Investments organization. It is an index fund of 500 stocks that tracks the performance of the Dow Jones Industrial Average. FDRXX has higher expense ratios than SPAXX as it is actively managed by Fidelity Investment professionals.
Which option is best depends on the individual investor’s goals and risk tolerance. Generally, SPAXX is an attractive choice for investors who wish to buy into the U.S. stock market with low cost and easy diversification. FDRXX may be the best choice for investors who want more active management in their investments.