Here Are The 20 Best Income Portfolios Built with ETFs for 2023
If you're looking for income then you should look at this list of the 20 best income portfolios.
What are the Fidelity Target Date Retirement Portfolios?
Fidelity Target Date Retirement Portfolios can be built with 5-6 ETFs. They are exposed to between 40% and 100% equities.
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How do you build the Fidelity Freedom Index portfolios with ETFs?
Here is how you build Fidelity Freedom Index portfolios with ETFs
This is for the Fidelity Freedom Index 2050 (35 years old)
- 62.11% US Total Stock Market
- 26.58% International All-World ex-US stocks
- 9.97% Total US Bond Market
- 0.02% Cash (money market fund)
- 1.32% Commodities
The letters in brackets denote the stock symbol for the recommended ETF. You can look up the symbols at your stockbroker. You can see a listing of all the ETFs we recommend on this page.
You can find the asset allocation for the rest of the portfolios below.
What is the historical return of the Fidelity Freedom Index portfolios?
Below you can see the historical return of Fidelity Freedom Index portfolios.
Portfolio data was last updated on 11th of August 2023, 08:35 ET
| Name | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down | Expense ratio | Yield |
|---|---|---|---|---|---|---|---|
| Fidelity Freedom Index 2030 (55 year old) | 10.25 | -16.42 | 7.54 | 8.03 | -28.19 | 0.05% | 2.18 |
| Fidelity Freedom Index 2040 (45 year old) | 12.54 | -17.31 | 8.79 | 8.39 | -34.81 | 0.06% | 2.05 |
| Fidelity Freedom Index 2050 (35 year old) | 12.54 | -17.31 | 8.79 | 8.39 | -34.81 | 0.06% | 2.05 |
| Fidelity Freedom Index 2060 (25 year old and younger) | 12.54 | -17.31 | 8.79 | 8.39 | -34.81 | 0.06% | 2.05 |
Here is what the table is showing you
Year to date: This shows what the portfolio has returned this year starting from the first trading day of the year.
10 Year return: This shows the compounded annualized growth rate over a ten-year period. The current year is excluded from calculations.
CAGR since 1989: This shows the compounded annualized growth rate since 1989. The current year is excluded from calculations.
Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs.
Yield: This is the expected dividend yield of the portfolio.
Please note that past performance is not a guarantee of future returns.
How does the Fidelity Freedom Index portfolio compare to the best portfolios?
Below you can see the returns of the best portfolios that we have benchmarked.
| Name | See Portfolio | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down |
|---|---|---|---|---|---|---|
| Ben Stein Retirement | Coming soon! | 4.05 | -18.03 | 9.46 | 10.8 | -35.42 |
| Paul Merriman 4-Fund-Portfolio | Coming soon! | 9.22 | -11.98 | 11.25 | 10.38 | -35.26 |
| S&P 500 | Coming soon! | 17.09 | -18.19 | 12.52 | 10.28 | -37.63 |
| Paul Merriman Target Date Portfolio (25 year old) | Coming soon! | 6.63 | -13.08 | 8.28 | 10.2 | -36.46 |
| Scott Adams Dilbert Portfolio | Coming soon! | 10.87 | -18.75 | 7.0 | 10.19 | -44.88 |
| JL Collins, Simple Path To Wealth, Wealth Building Portfolio | Coming soon! | 16.6 | -19.51 | 12.08 | 10.19 | -37.0 |
| American Institute of Individual Investors (AAII) Portfolio | Coming soon! | 3.74 | -13.91 | 9.7 | 10.16 | -40.85 |
| Paul Merriman Target Date Portfolio (35 year old) | Coming soon! | 6.57 | -13.22 | 8.31 | 10.08 | -36.35 |
| Assetbuilder.com Portfolio 14 | Coming soon! | 6.95 | -16.94 | 7.59 | 9.99 | -37.91 |
| Balanced Portfolio 90/10 | Coming soon! | 14.83 | -18.87 | 11.03 | 9.84 | -32.78 |
What is Fidelity?
Fidelity is a well know mutual fund provider.Fidelity is a privately owned company being the 4thlargest in assets under management.
They offer a slew of target-date retirement funds. They have two broad categories of target-date funds. One is passive (indexed) and one is active. We focus on the passive target-date portfolios in this article.
Fidelity is featured in the book Fidelity’s World: The Secret Life and Public Power of the Mutual Fund Giant.
Fidelity’s World: The Secret Life and Public Power of the Mutual Fund Giant
Fidelity’s Freedom Funds are simple to compare in contrast to other target-date funds. They are also very cheap to buy as a one-fund solution.
They are slightly cheaper than a comparable Vanguard target-date retirement fund. The 2060 target-date fund from Fidelity carries a 0.12% expense ratio while the comparable 2060 Vanguard target-date fund carries a 0.15% expense ratio. This comes out to a $30 difference per year per $10,000 invested.
There is one more interesting thing about the funds.
The interesting thing about the Fidelity Freedom Funds is their glide path. The funds hold off much longer with taking on bonds. This means that the funds are allocated more to stocks for longer. This should equal higher returns in the end as bonds have had a lower return historically than stocks.
This of course also adds more risk and more volatility. This should be a non-issue as they _are_target-date retirement funds and you shouldn’t care about them until retirement.
Below you can see the glide path.
Glidepath for Fidelity’s Freedom Funds
This chart is a few years old but it is a good representation of how the Fidelity Freedom Funds manages to hold off going into bonds.
Notice that their 2060 fund holds 10% in bonds? If they had even more courage they would go 100% into stocks as each 10% allocation to bonds roughly creates an approximate 0.5% drag on returns while not supplying any meaningful stability to the portfolios.
A 100% stock allocation experienced a 37.07% drawdown during 08′-09′. A 90/10% stock/bond allocation experienced a 32.83%
You can see their glide path progression here with a nice slider.
Note: Fidelity has changed the composition of their target-date funds. They no longer include for example commodities. This will be corrected in the near future.
Disclaimer: These are target-date funds. By design, their asset allocation will change over time. In general, target-date funds shift more of their assets towards bonds as you age to lower your risk. This means that the asset allocation below will have changed until we update it here at portfolioeinstein.com. This information on these funds was collected in 2018.
What is the asset allocation for Fidelity’s target-date retirement portfolios?
Below you find the asset allocation for Fidelity’s target-date retirement portfolios.
Note: Please check the fund prospectus for the exact asset allocation and funds to use.
We benchmarked these portfolios in 2018. Their allocation has changed since then so make sure you check up on them!
Fidelity Freedom Index 2030 (55 years old)
- 51.46% US Total Stock Market
- 22.11% International All-World ex-US stocks
- 24.03% Total US Bond Market
- 0.05% Cash (money market fund)
- 1.29% Commodities
- 1.06% TIPS
Fidelity Freedom Index 2040 (45 years old)
- 62.11% US Total Stock Market
- 26.58% International All-World ex-US stocks
- 9.97% Total US Bond Market
- 0.02% Cash (money market fund)
- 1.32% Commodities
Fidelity Freedom Index 2050 (35 years old)
- 62.11% US Total Stock Market
- 26.58% International All-World ex-US stocks
- 9.97% Total US Bond Market
- 0.02% Cash (money market fund)
- 1.32% Commodities
Fidelity Freedom Index 2060 (25 years old and younger)
- 62.11% US Total Stock Market
- 26.58% International All-World ex-US stocks
- 9.97% Total US Bond Market
- 0.02% Cash (money market fund)
- 1.32% Commodities
Make sure you select the right ETFs!
There are a lot of ETFs! It is pretty boring to sift through hundreds and hundreds of ETFs just to find the right one, but it is worth it!
Finding the right and BEST ETF could earn you a lot more money than number two on the list.
We have done the work for you – all for FREE.
We have carefully selected ETFs for each asset class that the portfolios on portfolioeinstein.com use. If you want to read more about our selection process and see what we consider the best ETFs please visit our article What Is The Best ETF?
If you are a European investor you need to buy European ETFs (they need to be of the UCITS kind!).
We have listed 47 of the best ETFs in our article What Are The Best ETFs For European Investors? (Here Is 47).
As of 2021 we also track socially responsible investing ESG portfolios. Socially responsible investing (ESG) portfolios prioritize investing that puts an emphasis on environmental, social, and corporate governance issues.
You can find the socially responsible investing ESG ETFs in the same article.
Where can I learn more about Fidelity target-date retirement portfolios?
See a comparison of target-date funds in our article What Is The Best Target Date Fund?
Learn more about target-date funds in our article Target Date Fund Portfolios
Fidelity has a few podcasts, which provide good financial information.
Suggestions for your next steps
If you have already committed to a portfolio then maybe you need help maintaining the portfolio. In this case you will find our rebalance worksheet useful.
Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.
You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.
