Feeling lazy about your investments? There’s a solution for that, and Fidelity index funds can help.

So-called “lazy investing” involves building a portfolio you can hold long term with limited oversight. Typically, you'd start by defining an asset allocation that fits your risk tolerance and investing timeline. Then, you'd use low-cost to implement that allocation.

Let's dive into the advantages of investing in index funds and explore seven low-cost Fidelity funds that can contribute to an efficient, wealth-building portfolio.Udabur Investment

Index funds are popular among experienced and novice investors. Their best features are their low costs and built-in diversification. Index funds also have wide-ranging investment themes, so they can be combined in different ways to create custom risk profiles.

Index funds don't have human fund managers actively picking and trading assets. Instead, they use a financial market index, such as the S&P 500, to define their holdings.

The index approach is less expensive than employing fund managers to identify stocks that match the fund's objectives. As a result, index funds have low expense ratios—usually below 0.20%. Actively managed funds often have expense ratios of 0.50% or higher.

Several studies have concluded that actively managed funds generally underperform index funds, so it's hard to argue there's value in the higher expenses. Most investors will do better with low-cost index funds instead.

Index funds streamline diversification by giving you exposure to dozens if not thousands of assets in a single share. Whether you want to own the S&P 500 or the Wilshire 5000, there's an index fund to support your goal. Building a position in one fund is far easier and cheaper than owning 500 or 5,000 individual stocks.

Index funds are versatile. You can invest in broad or narrow market segments. You can buy a fund that invests in the entire U.S. stock market or one that tracks the niche Nasdaq ISE Cyber Security Select Index. The first option has thousands of stocks, while the second has fewer than 30.

Given the range of options, you can use index funds to create a simple, two-fund portfolio that's easy to manage and understand. Or, you can combine 10 or more index funds for a more precise and tailored risk profile.

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The Fidelity index funds included below cover the most popular market segments. With one exception, these funds were chosen to limit overlap. That means you can combine them to get the exposures you want.

The exception is a multi-asset fund that's designed to be a one-stop shop. This is the last fund on our list, and it's a good option for investors who want a structured diversification strategy with minimal effort.

The other seven funds make ideal building blocks for lazy portfolios. Note that you can implement the same strategy with or another fund family as well.

The table below introduces the best Fidelity index funds with expense ratios no higher than 0.20%.

Data source: Fundresearch.Fidelity.com

Next, we'll dive into the specifics of each fund. One data point provided does require some explanation. As you'll see, the three-year average annual returns vary dramatically across these funds. The variation does not indicate superiority. It does demonstrate how the different asset types have responded to the economic forces in play in recent years.

Said another way, the standout performance of S&P 500 stocks recently compared to, say, small-caps is largely a function of market conditions. In other timeframes, have outperformed their larger counterparts. This is why diversification is so important. Holding diverse assets improves your chances of cashing in when one industry, economy or company type has a breakout moment.

Net assets: $512.3 billion

Expense ratio: 0.015%

Trailing 12-month (TTM) yield: 1.4%

Inception date: February 17, 1988

Three-year average annual return: 8.1%Guoabong Stock

Fidelity 500 tracks the S&P 500 index, which contains the 500 largest and most successful public companies in the U.S.

FXAIX is a popular fund because it provides low-cost access to a high-quality portfolio. The S&P 500 companies don't deliver every year, but they have an impressive record over longer timeframes. The index's average annual return between 1993 and 2023, for example, was about 9%, net of inflation and including dividends.

Many investors who own only one equity fund will opt for an S&P 500 fund like FXAIX.

Net assets: $33.4 billion

Expense ratio: 0.025%

TTM yield: 1.4%

Inception date: September 8, 2011

Three-year average annual return: 2.4%

FSMDX tracks the Russell Midcap Index, which includes the 800 smallest companies within the Russell 1000. The Russell 1000 contains the 1,000 largest U.S. public companies. Excluding the top 20% of the Russell 1000 leaves out large-caps and mega caps to focus on mid-sized businesses instead.

Some of today's mid caps will be tomorrow's large-caps. These mid-sized companies have good growth potential and are reasonably well-established. For those reasons, FSMDX can be a complementary addition to a portfolio that's already heavy with big players like Microsoft (MSFT) and Apple (AAPL).

Also, no stock in FSMDX accounts for more than 0.67% of the portfolio. That protects shareholders from any single failures.

Net assets: $24.7 billion

Expense ratio: 0.025%

TTM yield: 1.5%

Inception date: September 8, 2011

Three-year average annual return: -3.1

FSSNX invests in Russell 2000 stocks. The Russell 2000 includes the 2,000 smallest public U.S. companies in the Russell Index.

Smaller and younger companies have more room to grow than larger ones. Unfortunately, that growth potential comes with higher risk. Small-caps may have limited access to capital and can be more reactive to economic conditions.

A well-diversified small-cap fund like FSSNX delivers growth potential in a safer, diversified package. There are nearly 2,000 stocks in the portfolio, so the fund's performance isn't wholly dependent on any one of them.

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Net assets: $9.8 billion

Expense ratio: 0.055%

TTM yield: 2.9%

Inception date: September 8, 2011

Three-year average annual return: 2.0%

FSGGX uses sampling to mimic the performance of the MSCI ACWI (All Country World Index) ex USA Index. The portfolio features companies worth more than $10 billion that are based in Europe, emerging markets, Asia-Pacific and Canada.

FSGGX holds more than 2,300 foreign large-cap stocks, including several names you'll recognize. Chipmaker Taiwan Semiconductor (TSM), Novo-Nordisk (NVO) and automaker Toyota (TM) are three of the fund's top holdings.

This fund's portfolio provides exposures to different markets, currencies and growth drivers relative to domestic equity funds. And, because FSGGX excludes U.S. stocks, you can hold it alongside the top three funds on our list without overlap.Mumbai Investment

Net assets: $55.8 billion

Expense ratio: 0.025%

TTM yield: 3.2%

Inception date: March 8, 1990

Three-year average annual return: -3.6%

FXNAX tracks the Bloomberg U.S. Aggregate Bond Index with a sampling approach. The portfolio primarily consists of U.S. Treasury debt (41.9%), (25.92%) and pass-through mortgage-backed securities (25.9%).

Bonds function well alongside stocks in a diversified portfolio because they tend to be more stable than equities. Long-term, that stability contributes to lower portfolio volatility and improved capital preservation.

FXNAX is a good pick for domestic bond exposure because it's representative of the entire U.S. investment-grade bond market. Granted, rising interest rates have been tough on U.S. bonds in the last few years. However, this is a temporary circumstance. The Fed will eventually move to bring interest rates back down—and that will be good for bonds.

Net assets: $773 million

Expense ratio: 0.06%

TTM yield: 3.1%

Inception date: October 10, 2019

Three-year average annual return: -1.6%

FBIIX uses sampling to track the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Diversified Index (USD Hedged). The fund invests in government, corporate and securitized from developed and emerging markets. Since dollar-denominated debts are excluded, this fund does not overlap with FXNAX.

FBIIX, like other funds on our list, is a diversification play. The fund invests primarily in government and corporate bonds from issuers outside the U.S. A small position in FBIIX can lessen overall volatility, since foreign economies often move on their own cycles.

Net assets: $7.8 billion

Expense ratio: 0.06%

TTM yield: 2.0%

Inception date: June 29, 1999

Three-year average annual return: 2.7%

FFNOX is a blended fund that holds a set composition of domestic stock and bond funds alongside international stock and bond funds. The target allocation is:

50.6% U.S. stocks

24.2% developed market stocks

10.3% emerging market stocks

7.1% U.S. investment grade bonds

4.8% long-term U.S. Treasury bonds

3.1% international bond funds

The fund fulfills that allocation using Fidelity funds. The domestic equity exposure, for example, comes from the Fidelity 500 Index fund plus the Fidelity Extended Market Index Fund (FSMAX).

FFNOX is a good choice for investors who don't want to manage multiple positions, define their own asset allocation or rebalance their holdings. And, with 85% stock exposure, the fund is aggressive enough to suit younger or mid-age investors saving for retirement. Older investors may want a higher allocation of U.S. bonds to limit volatility.

Fidelity has a range of low-cost index funds you can use to structure your perfect lazy portfolio. It's as easy as deciding which exposures you want, investing in funds that deliver those exposures and watching your wealth grow over time.

Index funds are pooled investments that seek to replicate the performance of a financial market index. The most popular of these are .

Fidelity index funds use a benchmark index to define their holdings, rather than relying on a management team to hand-pick assets. Because index funds require less human capital to manage, they have lower expense ratios.

Fidelity index funds are suitable for long-term investing because they have diversity, low expense ratios and popular investment themes.