Fidelity Income Fund

Let me introduce you to the Fidelity Income Fund, one of the various investment methods available. If you're interested in investing, you might have heard of it before, but let's explore its features and why it's worth your attention.

What is the Fidelity Income Fund?

The Fidelity Income Fund is one of the leading dividend-focused funds managed by Fidelity, a major asset management company in the United States. This fund targets investors seeking stable returns and primarily invests in high-dividend-paying stocks listed on the US stock market.

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Fund Investment Strategy

• Focuses on investing in stocks with high dividend yieldsconsidering factors like the company's financial health and business performance for selective investment.
• Prefers stable companies that are not highly sensitive to economic fluctuationsto minimize risks associated with market volatility and pursue stable returns.

The Fidelity Income Fund has demonstrated stable performance over a long period. Since its launch in 2003, it has achieved an average annual return of around 6%, and its return over the past 10 years has also been relatively high, exceeding approximately 30%.

While it's a suitable product for investors seeking stable returns, it's important to note that the return can fluctuate depending on the volatility of the stock market, so thorough consideration before investment is crucial.

Understanding the Fund's Management Strategy and Investment Portfolio

This fund adopts an active management strategy. In other words, the fund manager actively analyzes market conditions and selects and manages investment targets. Extensive company research and analysis are conducted to assess the potential and risks of individual stocks.

The portfolio is regularly rebalanced to adjust investment weightings and add new stocks or sell existing ones. This process helps maintain the fund's target return and risk level.

As of March 31, 2023, the fund's main investment sectors include Finance (23%), Consumer Staples (17%), Healthcare (14%), Industrials (12%), and Utilities (11%). The top 10 holdings include Wells Fargo & Company, American Tower Corporation, Pfizer Inc., Johnson & Johnson, and UnitedHealth Group.

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Profitability Analysis: Dividends and Interest Income

The average dividend per share over the past 12 months was $1.64, representing 2.9% of the fund's net asset value (NAV) per share. The average payout ratio over the past 5 years has been approximately 78%.

Interest income is another source of revenue for the fund. As of March 31, 2023, approximately 40% of total assets were invested in interest-generating assets, primarily US government bonds and other fixed-income securities.

Risk Management and the Importance of Diversification for Investors

The fund's primary objective is to provide stable income, but investment always involves risk. The Fidelity Income Fund is actively managed and can be exposed to market volatility.

To mitigate these risks, it maintains a diversified portfolio. It invests across various asset classes such as stocks, bonds, and cash, and diversifies its investments globally. This diversified investment strategy gives investors the opportunity to earn stable returns while minimizing potential losses.

Exploring Investment Asset Classes

The following are the representative asset classes that this fund invests in.

• Stocks: Securities representing ownership in a company, offering the potential for high returns but also higher risk. They invest in a variety of stock sizes, including large-cap, mid-cap, and small-cap stocks.
• Bonds: Debt instruments where the issuer borrows funds from investors at a fixed interest rate for a certain period and must repay them. Investments include various bond types such as government bonds, corporate bonds, and municipal bonds.
• Cash Equivalents: Highly liquid assets primarily invested in short-term financial instruments. They serve as a hedge against market volatility and can be quickly converted to cash when needed.

Each asset class has unique characteristics and risk/return profiles, so investors should build portfolios that align with their investment goals and risk tolerance.

Evaluating Returns and Performance Indicators

Various indicators are used to evaluate a fund's performance. Among them, the most basic is the rate of return.

• Annual Return: Represents the fund's total return over the past year.
• Quarterly Return: Shows the fund's return over the past quarter.
• Recent Return: Indicates the fund's return over recent periods, such as the past week, month, or three months.

While these returns are helpful in understanding the fund's past performance, they do not guarantee future performance.

Other key performance indicators include Sharpe Ratio, Jensen's Alpha, and Treynor Ratio. These indicators measure the fund's risk-adjusted returns and help assess the fund manager's ability.

Subscription Method and Investment Procedure

To subscribe to the Fidelity Income Fund, follow these steps:

• Account Opening: You can open an online account through the Fidelity Investments website or mobile app, or visit a Fidelity Investments branch to open an offline account.
• Determine Investment Amount: Decide on the amount you want to invest. The minimum investment amount varies depending on the fund, so it's important to check.
• Fund Selection: Select the Fidelity Income Fund. You should carefully choose the right fund based on the fund type, investment target, and management strategy.
• Investment Application: After depositing the investment amount into your account, complete the fund investment application form. You'll need to provide details such as the investment period and purpose.
• Investment Approval: Fidelity Investments will review your investment application and determine whether to approve it. Once approved, your investment in the fund will begin.
• Investment Management: After investing, you can regularly check the fund's returns, asset allocation, and make adjustments to your investment strategy if needed. Also, make sure to check for fees and other extra charges.

Factors to Consider When Choosing a Fund

When selecting the right fund from among various options, it's essential to consider several key factors. Here are some elements to consider when choosing the Fidelity Income Fund.

• Goals and Risk Tolerance: Funds come with different risk levels, so it's important to choose a fund that aligns with your investment goals and risk tolerance. If you're aiming for high returns, you can opt for high-risk funds, but if you prefer stable returns, you might consider low-risk funds.
• Returns and Performance: You can analyze past returns and performance to evaluate the fund's track record. It's advisable to choose funds that have consistently performed well over the long term.
• Fees and Expenses: Funds incur management fees, sales fees, and other expenses. You should consider these costs when selecting a fund, and ideally, aim for funds with lower expenses.
• Asset Allocation: Review the fund's asset allocation to understand how it's diversified across stocks, bonds, cash, and other asset classes. Choosing a fund with a balanced asset allocation can help reduce the overall risk of your portfolio.
• Management Strategy: Understand the fund's management strategy and ensure it aligns with your investment goals. Active and passive management styles can affect performance and risk.

By considering these factors when choosing the Fidelity Income Fund, you can potentially achieve more successful investment outcomes.

As a product suitable for long-term investment due to its stable returns and low volatility, it's worth exploring if you're considering retirement planning or saving for retirement.