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I’ve had a fairly large stake in FMSDX for about 2.5 years. Unfortunately, I bought it just before the last big market drop, and it’s just broken even during the past month. I’m sticking with it because it has a great record and I trust Fidelity’s management of its allocation funds. It pays dividends monthly, if that’s important to you. It has greatly outperformed most funds with similar asset allocations since its inception and hopefully that will continue.
FMSDX is a good fund, but may be a little misunderstood.
It is a multi-asset fund that has a mix of stocks + bonds + alternatives (HYs, FR/BL, convertibles, preferreds, EMs, REITs, etc). Unfortunately, multi-asset funds are not classified separately (M* calls them supportive) within the allocation/balanced funds and there aren't many around (Vanguard shut its multi-asset fund).
So, it is formally classified as moderately-conservative (like VWINX), but it acts like moderate-allocation (like VWELX) due to its equity and/or HY exposures. This is seen from its SD, effective-equity, etc. Its nominal equity % can also vary a lot - recently, it seems to have reduced its equity (only 33% now) but added more HY. So, in this LC-rally, it is lagging growthy moderate-allocation FBALX, FPURX, etc; but it is better than VWINX, etc.
So, as a component of portfolio, it serves a purpose.
We also own TAIFX in our taxable account, and it is also classified as moderately conservative. It’s supposed to be tax efficient. However, even considering the tax advantages of TAIFX, FMSDX has greatly outperformed it on an after-tax basis.
Be a bit careful if looking at funds (of any category) holding a lot of income-producing stocks. Oh - It’s a great sector / always has been - except that it looks like it’s been “hot as nails” for several years now. (Check out PRFDX.) The income producers can and do run in cycles.
I’ve seen Yogi’s description and it does not appear FMSDX is riding that wave - perversely, that might be a good sign. If you find something similar that’s wildly outperforming, take a look at the equity component before you leap.
I don’t own any Fidelity funds, but have been very impressed by the ones I’ve looked at. Steady performers, often with very low ERs.
Comments
It is a multi-asset fund that has a mix of stocks + bonds + alternatives (HYs, FR/BL, convertibles, preferreds, EMs, REITs, etc). Unfortunately, multi-asset funds are not classified separately (M* calls them supportive) within the allocation/balanced funds and there aren't many around (Vanguard shut its multi-asset fund).
So, it is formally classified as moderately-conservative (like VWINX), but it acts like moderate-allocation (like VWELX) due to its equity and/or HY exposures. This is seen from its SD, effective-equity, etc. Its nominal equity % can also vary a lot - recently, it seems to have reduced its equity (only 33% now) but added more HY. So, in this LC-rally, it is lagging growthy moderate-allocation FBALX, FPURX, etc; but it is better than VWINX, etc.
So, as a component of portfolio, it serves a purpose.
I have a v large chunk in it and it is still down -8%.
The hope is to get out of it this year and move, at least in part, into FPACX over time.
Be a bit careful if looking at funds (of any category) holding a lot of income-producing stocks. Oh - It’s a great sector / always has been - except that it looks like it’s been “hot as nails” for several years now. (Check out PRFDX.) The income producers can and do run in cycles.
I’ve seen Yogi’s description and it does not appear FMSDX is riding that wave - perversely, that might be a good sign. If you find something similar that’s wildly outperforming, take a look at the equity component before you leap.
I don’t own any Fidelity funds, but have been very impressed by the ones I’ve looked at. Steady performers, often with very low ERs.