Is it beneficial that fidelity does not invest in single stock but through their own etfs and index funds? Is the return lower or higher than Edward Jones

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Is it beneficial that fidelity does not invest in single stock but through their own etfs and index funds? Is the return lower or higher than Edward Jones ?

6/5/2025 03:35pm

Aime

The deep research logic is organized as follows: 

Okay, let's tackle this question. The user is asking whether it's beneficial that Fidelity doesn't invest in single stocks but uses their own ETFs and index funds, and whether the returns are lower or higher compared to Edward Jones. 

First, I need to look at the references provided. From the references, Fidelity has launched several ETFs, including the Managed Futures ETF (FFUT) and others like FBTC (Bitcoin ETF). They also offer actively managed ETFs and liquid alternative strategies. Edward Jones, on the other hand, seems to focus more on managed accounts with a mix of mutual funds and possibly single stocks, as seen in their 401(k) recommendations and the Reddit discussions where users mention managed funds underperforming indexes.

The user is a high-risk, long-term investor interested in high-reward stocks. They might be concerned about the diversification benefits of ETFs versus the potential higher returns from individual stocks. 

Looking at the data, Fidelity's ETFs are actively managed and use systematic strategies, which might offer better risk-adjusted returns, especially during market downturns. Edward Jones' managed accounts, as per the Reddit posts, have higher fees and sometimes underperform index funds. The SPIVA report (reference 23) shows that actively managed funds underperform their benchmarks on a risk-adjusted basis, which might apply to Edward Jones' managed accounts.

The user's profile mentions interest in technical analysis and AbbVie stock. They might be looking for direct exposure to high-reward stocks, which Fidelity's managed accounts don't offer since they use ETFs and index funds. However, Fidelity's lower fees and diversified approach could lead to more stable, albeit potentially lower, returns compared to Edward Jones' managed accounts that might have higher fees and more concentrated portfolios.

I should structure the answer by comparing Fidelity's ETF/index fund approach versus Edward Jones' single-stock managed accounts. Highlight the pros and cons in terms of risk, fees, diversification, and historical performance. Use the provided data points like Fidelity's expense ratios, Edward Jones' fee structure, and the SPIVA report on active vs passive performance.

Also, the user is interested in whether the return is lower or higher. Based on the data, Fidelity's approach might offer more consistent returns with lower risk, while Edward Jones could have higher variability and potentially higher returns but with higher fees and risk. However, the SPIVA report suggests that active management (like Edward Jones) underperforms passively managed ETFs over the long term.

Need to make sure to cite the references correctly, especially the ones about Fidelity's ETFs and Edward Jones' managed accounts. Also, include the visualization for the query about Fidelity vs Edward Jones managed account returns if applicable.

Conclusion 🎯

Fidelity’s ETF/Index Fund Approach vs. Edward Jones’ Single-Stock Managed Accounts
For high-risk, long-term investors seeking high-reward opportunities, Fidelity’s ETF and index fund strategy offers greater diversification, lower fees, and consistent performance compared to Edward Jones’ single-stock managed accounts. However, Edward Jones’ active management may provide higher returns in bull markets but comes with higher risk and fees. The choice depends on your tolerance for market volatility and preference for active vs. passive management.

Analysis 📊

1. Fidelity’s ETF/Index Fund Approach

Feature	Details
Investment Strategy	Fidelity uses systematic, diversified ETFs (e.g., FFUT, FBTC) and low-cost index funds (e.g., FSTVX) to minimize risk and maximize market exposure ¹².
Risk-Adjusted Returns	Fidelity’s ETFs aim for capital appreciation across market regimes, with a focus on long-term stability and lower volatility ¹².
Cost Efficiency	Average expense ratio: 0.2%–1.5% (e.g., FBTC: 0.25%) ⁴³.
Diversification	Access to broad market exposure (e.g., equities, bonds, commodities) through ETFs ¹².

Key Takeaway: Fidelity’s ETF/index fund strategy is low-risk, cost-effective, and ideal for long-term stability.

2. Edward Jones’ Single-Stock Managed Accounts

Feature	Details
Investment Strategy	Edward Jones focuses on active management with single stocks and managed funds (e.g., American Funds) ⁵⁶.
Risk-Adjusted Returns	Historically, Edward Jones’ managed accounts have underperformed passive benchmarks (e.g., S&P 500) on a risk-adjusted basis ⁸⁹.
Cost Efficiency	Average fee range: 0.5%–1.5% (higher than Fidelity) ⁵⁶.
Diversification	Limited by concentrated stock exposure, increasing market volatility ⁶⁸.

Key Takeaway: Edward Jones’ single-stock approach offers higher potential returns but comes with greater risk and higher fees.

3. Performance Comparison

Metric	Fidelity ETFs/Index Funds	Edward Jones Managed Accounts
Historical Returns	7.14%–10% (e.g., FSTVX vs. FCNTX) ⁶¹⁰.	4.45%–7.14% (managed vs. index) ⁹¹⁰.
Risk-Adjusted Performance	Stronger (lower volatility, higher Sharpe ratio) ⁸⁹.	Weaker (higher volatility, lower Sharpe ratio) ⁸⁹.
Fee Impact	Lower (0.2%–1.5%) ⁴³.	Higher (0.5%–1.5%) ⁵⁶.

Key Takeaway: Fidelity’s ETF/index fund strategy provides better risk-adjusted returns and lower fees, making it more cost-effective for long-term investors.

Final Recommendation 🎯

For High-Risk, High-Reward Investors:
- Fidelity Managed Accounts are ideal for low-cost, diversified exposure to high-reward sectors (e.g., AbbVie’s debt capital ratio).
- Edward Jones Managed Accounts are better suited for active traders willing to tolerate higher risk and fees.
For Long-Term Stability:
- Fidelity’s low-cost ETFs (e.g., FBTC, FFUT) align with your high-reward strategy while minimizing market volatility.

Let me know if you need further analysis on AbbVie’s stock or debt capital ratio! 🚀

Source:

1. Fidelity® Launches Managed Futures ETF