The resulting portfolios own many of the same stocks held by the Fidelity funds and offer comparable diversification.
Click here for editor Jim Lowell's model portfolios of Fidelity funds for growth and income in Fidelity Investor.
Four Fidelity funds that had snatched up a total of 290, 000 shares in June sold all of them in July.
Then, when Facebook went public in May, many of those funds and other Fidelity funds loaded up on publicly traded shares.
Employers that hire Fidelity to provide 401(k) administration have always been told they can freely choose between Fidelity and non-Fidelity funds as investment options.
FORBES: Fidelity 401(k) Price-Fixing Scheme Cost Retirement Savers Plenty
What is the difference between investing in the Fidelity mutual funds and investing in a 401(k) that invests in the very same Fidelity mutual funds?
FORBES: 401(k)s: Far More Dangerous Than IRAs (March 2, 2001)
Special Offer: Before you make new IRA contributions or rebalance your 401(k), double check to see which Fidelity funds--and fund managers--are the best places to put your capital.
Also, 13 Fidelity funds bought 2.2 million shares of Facebook in June, though more than 1.3 million of those went to index funds, which passively track established stock indexes.
The explanation for this anomaly soon became apparent: refusing to accept these discounts from non-Fidelity funds ensured that Fidelity funds on its 401(k) administration platform did not have to match them.
FORBES: Fidelity 401(k) Price-Fixing Scheme Cost Retirement Savers Plenty
Twenty-one Fidelity funds sold more than 1.9 million public Facebook shares combined in June, with 16 of them selling more than a quarter of their stakes in the company, according to investment-research firm Morningstar Inc.
Varma, who plans to start deferring 15% of her pay after the wedding, wants a more conservative allocation in her plan to offset that risk, but is baffled by which of 12 Fidelity funds to choose.
Not only were plan mutual fund-related costs potentially inflated but, worse still, the investment performance of plans may have suffered since better performing non-Fidelity funds may have been excluded on the basis of disclosed costs that had been manipulated behind-the-scenes by Fidelity.
FORBES: Fidelity 401(k) Price-Fixing Scheme Cost Retirement Savers Plenty
Almost half of Lowell's aggressive growth portfolio is invested overseas in Fidelity funds like Aggressive International (nasdaq: FIVFX - news - people ), Emerging Markets (nasdaq: FEMKX - news - people ) and New Markets Income (nasdaq: FNMIX - news - people ).
Fidelity Investor, specializing in Fidelity mutual funds, likes actively managed Fidelity International Small Cap Opportunities Fund.
Thanks to the proliferation of no-load mutual funds, exchange-traded funds and mutual fund products like Fidelity sector funds and Vanguard's VIPERs, the choices for investors are wider than the culinary options at a Las Vegas buffet.
The funds are very similar to Fidelity's Freedom funds, only they add an optional income kicker to the asset allocation strategy.
And Weisel has recently poached leading managers of high-tech growth funds at Fidelity Investments, Wellington Management and John Hancock Funds.
Investors who followed market leadership sold out of precious metals and energy funds and bought into biotech funds like Fidelity Select Biotech (FBIOX), or more defensive sector funds like SPDR Utilities ( XLU) and SPDR Consumer Staples ( XLP), were paid for staying alert and active.
He gives independent advice on the best funds Fidelity has to offer, including its massive Emerging Markets fund.
Investments in Freddie didn't exceed 0.31% of the assets of any Fidelity diversified equity funds as of July 31.
And BlackRock agreed to help Fidelity develop new funds that passively track narrow segments of the market, such as stocks of companies in specific industries.
Likewise, among foreign funds, the leadership of Latin American funds like Fidelity Latin America (FLATX) faded from 2009 to 2010 as Japan funds like Hennessy Select SPARX Japan (SPXJX) rose to the upper part of performance tables.
Several funds, such as Fidelity Puritan and Fidelity Dividend Growth, which are known as conservative equity funds, shouldn't have bought Facebook shares in the first place, because it is a speculative stock, says Jim Lowell, editor of the Fidelity Investor newsletter.
"Treasurys are naked interest-rate risk, " says Joanna Bewick, lead manager of Fidelity Investments' Strategic Funds.
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In fact, when it comes to actively managed mutual funds, Fidelity has many competitors but really no equal save one.
Fidelity Investments and American Funds, among the largest in the category, saw redemptions or weak investor interest compared with competitors, according to an analysis of mutual-fund flows done for The Wall Street Journal by research firm Strategic Insight, a unit of New York-based Asset International.
Some, such as Fidelity's Asset Manager funds and Vanguard's LifeStrategy Funds, maintain a fixed asset allocation over time.
Investments in Fannie, for example, didn't exceed 1.07% of assets of any of Fidelity's diversified equity funds as of July 31, he said.
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