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The '04 performance figures are in for stocks and mutual funds. My newspaper carries an AP summary today of mutual funds. They list the precentage increase for the year (including distributions) and the ranking vs peers (1 to 5).

I am amazed at the number of Fidelity funds rated 4 or 5.

In the days of Peter Lynch, Fidelity was as outstanding achiever. Now performance seems medicore.

Especially disappointing is the performance of the sector funds, especially FSPTX, which turned in a 4% return for the year (ranks 4th group). Technology performance was spotty last year, but I can easily name quite a few technology stocks that were up 100% or more. Apple, Research in Motion, PalmOne, eBay, Yahoo. You would think a professionally managed fund should be able to manage 20% return or better in that environment.

Fidelity dropped most of their loads in the last year. What happened? Did they lose key managers? Were they tramatized by the scandals?

Are the Fidelity funds managed to match the indexes? Or are they managed for best return for their share holders?

Shouldn't there be key words in the prospectus to tell us which kind of fund they are offering?

Check out the performance of your funds!! Caveat emptor!!
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Good points Paul!
Problem for Fidelity is often that with their size as well as large share of the IRA/401k Etc. market their funds quickly become too big to do much else than being an index-hugger. On top their managed funds then have higher expense ratios leading to the worse results.

On top of that they seem to change managers way to fast.

Personally I do not think that many managers on this planet can add any value to a fund - but there are a few good managed fund companies out there that often prove me wrong such as Dodge and Cox, T. Row Price, Bridgeway and also Vanguard despite being most famous for their index funds of course.

Cheers, Ben
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The '04 performance figures are in for stocks and mutual funds. My newspaper carries an AP summary today of mutual funds. They list the precentage increase for the year (including distributions) and the ranking vs peers (1 to 5).

Hi Paul,
Does you paper have this posted on their website? (gotta link?)

Especially disappointing is the performance of the sector funds,... You would think a professionally managed fund should be able to manage 20% return or better in that environment.

Kinda the nature of the beast for actively managed (moreso for sector) funds, isn't it? IIRC, wasn't their Wireless sector fund a rock star this past year?
Isn't this range of results the exact reason why there's such a strong school of thought for staying in index funds?
<he asks while holding only about 5% in index funds>


Fidelity dropped most of their loads in the last year. What happened? Did they lose key managers? Were they tramatized by the scandals?

Hmm...I took this, along with their reduced mgmt fee for index funds, as their challenge to better secure #1 assets position over VG.
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The paper is the NJ (Newark) Star-Ledger. It is supposedly fully on line to subscribers, but most of it is on nj.com. Try here--

http://studio.financialcontent.com/Engine?Account=nj&PageName=MARKETSUMMARY

The listing is titled "How to Read our Year-End Mutuals". Its source is not indicated, although I presume most of their financial content comes from wire services. Star-Ledger is a Newhouse paper.

Of course, now we know the S&P return for the year is 9%--not bad compared to the 11% considered typical. But I know friends reporting 25% returns. So good managed funds did well, but index funds were average.

Both Vanguard and T Rowe Price did quite well. Most of theirs are ranked 1 or 2.

For index funds, there is little margin for error. So sure, low costs are essential to be a top rated fund. For managed funds, the potential range is much wider.

Fidelity's bond funds did OK, but most of the others were also rans.
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Fidelity funds have been performing poorly for some time - not just this year. Unfortunately, my wife's retirement plan is exclusively Fidelity, so we are just making the best of it.

I do not like Fidelity as a fund company or as a brokerage company. They gave me terrible service and blamed it on their computer system.
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I haven't seen this year's numbers, but one of the few consistent Fidelity stars lately has been Low-Priced Stock, but that's been closed to new investors for a while now.

My 401(K) is with Fidelity. The investment options I have (about 20 of them) are decent, I guess, but not as good as I'd like. Since I have about a 70/30 stock/bond allocation, usually I just buy Freedom 2020 with the current year's contribution (since that best approximates the asset allocation mix I keep) and then sell it and reallocate/rebalance each year.

I try to keep a similar asset allocation with my 401k as my other tax-deferred investment account. But in '04 my 401k had about an 8% rate of return compared to 14-16% for my other accounts. (But to be fair my 401k didn't have options like emerging markets and REITs which have done very well for me of late.)

What few non-Fidelity options we have in there are among the best performers available to us. They added a small cap fund this year to replace Low Priced Stock for those not currently in it (which is a Morningstar 5-star fund but I don't remember the name) and there's a Pimco bond fund which has done quite well, too.

#29
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Are the Fidelity funds managed to match the indexes? Or are they managed for best return for their share holders?

Most of the large managed funds have the core of the fund in the relevant index, with the balance being a sector bet by the manager. There's very little true stock picking in large funds.
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Actually the SP500 index funds returned about 11% not 9%. The 11% include dividends.

My big winners this year was REITs(like last year), EM (like last year) followed by microcaps and EFA/VTRIX.

Cheers, Ben
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It's not just Fidelity, no mutual fund familly is doing well. They all offer lame choices and are living on past (tech bubble) glory.

The lastest fund I see getting media is Bill Miller legg mason value trust

Same results as SP500 over 5 years
http://finance.yahoo.com/q/bc?t=my&s=LMVTX&l=on&z=m&q=l&c=&c=%5EGSPC

Right now the closest thing to Peter Lynch of the olden days is Pimco's Bill Gross. Jim Rogers, and Jim Grant might also fall into that catagory but they do not manage money.

Also note that fidelity seems to have dropped the expense ratio on it's index funds to below those of vanguard.
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I am an idex fan myself but there ARE some good managed fund families out there not just pumping the latest fad fund that sometimes prove my managed fund sceptism wrong. Some of them are; Dodge and Cox, Bridgeway, T.Row Price and Vanguard (mostly know for indexing).

Bill Gross DO manage money; 2 bond funds.

Cheers, Ben
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There are a number of funds that have done well this year. Here is a list of funds up over 29%: PBRTX AEMGX RSPFX UMEMX ACINX RSCOX. The natural resurce funds have also done well - PSPFX, for example.
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In the days of Peter Lynch, Fidelity was as outstanding achiever. Now performance seems medicore.

My core holdings are index funds held in my 401K and taxable account at Vanguard. But I also have accounts at Fidelity and use these to supplement my core holdings with actively managed funds. I've been very happy with the 2004 performance of:

FRESX 24.6%
FDVLX 14.8%
FSMEX 16.9%
FISMX 24.7%

These percentages represent the increase in NAV only, dividends are not included, but would increase the percentages above.

I am also happy with the return in my Fidelity annuity account of 17.34%, mostly due to emerging market and REIT holdings.

I am less impressed with FAERX (12.48%), which I was stuck with to form my large-cap foreign core in my 401K. The 401K is today dropping FAERX and replacing it with an index fund that tracks the MSCI EAFE Index (18.42%)--me happy!

2old
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