This Day In Financial History

Ted

FYI:
Regards,
Ted
June 15:

1995: Less than a year-and-a-half after breaking the 800 barrier, the NASDAQ Composite Index closes above 900 for the first time, finishing the day at 902.68.

1979: Fidelity Investments drops the sales charges on many of its largest mutual funds, including Fidelity Fund, Magellan, and Puritan -- giving a huge boost to the direct purchase of no-load funds by retail investors.

Source: Jason Zweig's Blog

msf

Somewhere in the mid-90s, Fidelity started removing sales charges on its funds. For example, FGRIX dropped its sales charge on Oct. 20, 1995. Prior to that, it had experimented with waiving loads on some funds inside of IRAs. But it wasn't until 2003 that it permanently dropped "the sales charges on many of its largest mutual funds, including ... Magellan ..."

Fidelity Investments said Monday [June 23, 2003] it will drop the 3 percent front-end sales charge, or load, on several of its key stock funds, including the flagship Magellan fund.

Four other Fidelity funds -- including Contrafund FCNTX, ... Contrafund II FCONX, ... Low-Priced Stock FLPSX, ... and New Millennium FMILX, -- also will become available without a load ...

Source:https://www.marketwatch.com/story/fidelity-drops-sales-charges-on-some-funds
 

Fidelity Investments said it eliminated the sales charge on five funds, including its flagship Fidelity Magellan (FMAGX).

In addition to Magellan, the largest actively managed U.S. stock fund, Fidelity dropped the 3% front-end sales commission, or load, on Fidelity Contrafund (FCNTX), Fidelity’s second-largest fund; Fidelity Contrafund II (FCONX); Fidelity Low Priced Stock (FLPSX); and Fidelity New Millennium (FMILX).

Source: https://www.thinkadvisor.com/2003/06/24/fidelity-drops-sales-charge-on-magellan-fund/

Of course many of Fidelity's largest funds in 2003 didn't even exist in 1979.

davidrmoran

>> 1979: Fidelity Investments drops the sales charges on many of its largest mutual funds, including Fidelity Fund, Magellan, and Puritan -- giving a huge boost to the direct purchase of no-load funds by retail investors.

Zweig cites "Fidelity Investments, Mutual Fund Guide, June, 1994. (Suggested by: Robert N. Veres, editor, Inside Information.)" I too am surprised by (meaning disbelieving of) this. If it's true, and my memory tells me it's not, some of them got reinstated at some point. I believe.

msf

Perhaps we're reading too much into the statement that the sales charges were dropped. That could mean "removed", or merely "reduced", as in: the retailer dropped the price of its merchandise to give a huge boost to its sales. Or it could mean "removed but replaced":

In 1979 Fidelity removed its 8½ percent sales charges on almost all its funds and began selling its funds directly to the public with no sales charges (no load) or a low load of two to three percent

https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/businesses-and-occupations/fmr-corp

I don't doubt that Fidelity Fund became noload in 1979, but Magellan was given a 3% load, and Puritan got a 2% purchase/1% redemption load.

Here's a 1989 book (complete) where you can see how in the 1980s Fidelity grouped its funds into international equity, capital growth, growth and income, sector funds (then called "Select Funds"), taxable bond funds, muni funds, money market funds. Funds that carried a load then usually followed the Puritan 2%/1% model, except for a few equity funds with a 3% purchase load: Overseas FOSFX, Growth Company FDGRX, Magellan FMAGX, and OTC Portfolio FOCPX. International Growth and Income Fund (now Int'l Discovery) FIGRX was the oddball, at 1%/1%.

(Around 1990 Fidelity changed the 2%/1% loads into 3% purchase loads.)

The Investors Guide to Fidelity Funds, Winning Strategies for Mutual Fund Investing
http://www.tangotools.com/ui/fkbook.pdf

davidrmoran

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