Fidelity Cash Reserves, or FDRXX, is a well-established money market mutual fund. These types of mutual funds pool together monies from many different investors to purchase securities. Money market funds invest in debt securities and have minimal credit risk and short maturities for investors. They are issued by companies or government entities that borrow money and then pay back principal and interest to these investors.
More About FDRXX
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The writers for Forbes Advisor include Fidelity Cash Reserves in their list of the best 2021 money market mutual funds. Others include Vanguard Treasury Money Market Fund, Invesco Premier Portfolio Fund and the Schwab Value Advantage Money Fund. Some of FDRXX's specific holdings are the Federal Home Loan Bank, U.S. Treasury Bills and Nomura Securities International, Inc. FDRXX plans to invest more than 25 percent of its assets in companies that are part of the financial services industry.
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The FDRXX fund also invests in U.S. government securities and repurchase agreements, plus U.S. dollar-denominated money market securities from domestic and foreign issues. As of October 2021, FDRXX's total net assets were more than $211 billion. The main percentage of the assets were financial company commercial paper, followed by U.S. Treasury repurchase agreements, non-negotiable time deposits, certificates of deposit and other repurchase agreements. There is no minimum amount of money required to invest in FDRXX.
FDRXX Market Performance
According to the writers for Finny, the FDRXX yield is 0.01 percent. They also tracked the fund's returns over different periods. The 3-year return was 0.84 percent, the 10-year was 0.44 percent and the 15-year return was 0.92 percent. Another plus is their 15-year return, which is 0.92 percent; this is close to the USTREAS Treasury Bill Auction Average 3 Month benchmark index of 0.93 percent. It is also good to know that there are no front-end, back-end or 12b1 sales fees.
The 3-year return of 0.84 percent is lower than the USTREAS Treasury Bill Auction Average 3 Month benchmark index of 1.05 percent; the FDRXX 10-year return of 0.44 percent is lower than the USTREAS Treasury Bill Auction Average 3 Month benchmark index of 0.61 percent. Considering this data, along with the fund's low 0.26 percent expense ratio, Finny rated FDRXX a 50 out of 100 as far as money market mutual funds go.
What is FZDXX?
Writers for Mutualfunds.com post that Fidelity's FZDXX mutual fund invests more than 25 percent of its assets in the financial services industry sector, mainly in U.S. dollar-dominated money market securities from domestic and foreign issuers as well as repurchase agreements. It is smaller than FDRXX, with $30.39 billion in assets, but the minimum investment is much higher, $100,000.
FZDXX's 3-year return is 0.99 percent, which is on par with the USTREAS Treasury Bill Auction Average 3 Month benchmark index of 1.05 percent. The 5-year return is 1.11 percent, also close to the USTREAS Treasury Bill Auction Average 3 Month benchmark index of 1.05 percent. Finally, the 10-year return was 0.6 percent; this is almost the same as the USTREAS Treasury Bill Auction Average 3 Month benchmark index of 0.61 percent. Its expense ratio is just 0.23 percent, considered to be on the lower side.
If you are at all unsure which funds are best for your investment portfolio, it's recommended that you speak with a financial advisor. They can work with you and your financial goals to determine the best way forward for you.
Consider also: What Is the Difference Between Mutual Funds & Money Market Funds?