Sail Boat

Fidelity Giants Holdings Mirror Vanguard

Sail Boat

Why do Fidelity's biggest funds tend to track the S&P 500 so closely? A closer look at them shows they hold many of the same stocks in the same amounts.

A remarkable 65% of Fidelity Magellan (FMAGX) stock holdings are absolutely identical to the S&P 500, IndexFunds.com's exclusive new study shows. Similarly, 63% of Fidelity Growth & Income (FGRIX) stocks and 58% of Fidelity Blue Chip Growth (FBGRX) stocks are held in exactly the same amounts as the S&P 500.

This study adds strength to the claim that Fidelity is charging large fees for stocks that can be obtained at far less cost with index mutual funds such as the Vanguard S&P 500. The results are strengthened by high correlations between Fidelity's top funds and the S&P, which are all among the 20 largest mutual funds sold in the US.

Fund Size Annual Fees S&P Holdings S&P Correlation
Vanguard S&P 500 $105B 0.18% 99% 99%
Fidelity Magellan $104B 0.75% 65% 89%
Fidelity Growth and Income $42B 0.68% 63% 87%
Fidelity Blue Chip Growth $30B 0.71% 58% 86%

 

Whether investors tend to view past behavior as an indication of future performance (correlation) or prefer to rely on comparing physically identical portfolios, there appears to be little justification for a thoughtful investor to choose any one of these giant Fidelity funds over an inexpensive S&P fund.

The study was performed using Wiesenberger data of mutual fund holdings.