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It's a fund of funds targeting a 20% allocation to underlying equity funds. Its current portfolio holds 19.86% in equities (per M*).
Its performance (raw or risk-adjusted) doesn't compare favorably to a target date retirement income fund like VTINX, let alone a 30%-50% fund like VWINX.
The fact that you're looking at the advisor class of shares rather than the retail class of shares (TSILX) suggests that this is being proposed for (or is already in) a managed portfolio. For that purpose, it's a serviceable fund, but nothing I'd get excited about.
Looks like a pretty good fund. The only thing that jumps out on a cursory look is that it is very deep into junk bonds - more than half are B rated, another nearly 10% below B.
There are so many exceptions that if this is something you really want to do, it shouldn't be a problem. It doesn't apply to MMFs or reinvested divs. It doesn't apply to trades totaling less than $10K per day, as noted above. (The limit had been $1K, but was raised to $10K a year ago.)
Or you can use the same automatic investment mechanism that people use to buy TF funds for a $5 fee. If you use this to buy a Fidelity fund, then regardless of the amount, the transaction doesn't count as part of a round trip.
- Sell shares of a non-Fidelity NTF fund within 60 days of purchase and you will incur a short term trading (not early redemption) fee imposed by the brokerage. (The funds themselves may impose an additional early redemption fee; Fidelity funds do not.) https://www.fidelity.com/mutual-funds/all-mutual-funds/fees
Unlike the excessive trading policy, which applies to Fidelity funds and is focused on the number of trades in a fund and not the shares, short term trading fees are focused on which shares you sell quickly.
Shares are treated FIFO, so this is also a relatively easy fee to avoid. If you purchase 100 shares in May, another 100 in July, and sell 100 in August, you will be fine. Even if you specifically identify the July shares as the ones you're selling.
I did quickly, and while the equity part of WBALX may be "solid", I question the performance of the bond portion in the current rising interest rate environment. It makes up 42% of the fund's portfolio, and of that 67% consists of short term US Treasuries and AAA bonds. It's the only balanced fund I have come across where the SEC dividend yield is negative, according to M*.
The majority of the fund's bonds may actually be a detractor from its future performance, unless management makes a change. Holding cash instead may actually be a better choice in the current environment.
My other question is why a "solid" fund like WBALX has accumulated only $223 million in assets over the past 18 years? What am I missing?
I did quickly, and while the equity part of WBALX may be "solid", I question the performance of the bond portion in the current rising interest rate environment. It makes up 42% of the fund's portfolio, and of that 67% consists of short term US Treasuries and AAA bonds. It's the only balanced fund I have come across where the SEC dividend yield is negative, according to M*.
The majority of the fund's bonds may actually be a detractor from its future performance, unless management makes a change. Holding cash instead may actually be a better choice in the current environment.
My other question is why a "solid" fund like WBALX has accumulated only $223 million in assets over the past 18 years? What am I missing?
Fred
While a negative yield is less than ideal, their short-term bond holdings have probably held up better than many other bond sleeves in recent quarters. That type of allocation is probably why this fund has less volatility. Works for some, not for others.
I own WBALX and I am happy with its bond holdings. when the market crashes which it will, I think WBALX will hold up well. I consider it a sleep well at nite fund.
Yes-and you can sell amounts of Fidelity funds under 10k within 60 days without incurring early redemption transaction fees.
Which brokerage are you referring for the above. At Fidelity, it’s own funds have a 30 day holding requirement, a violation of which is taken seriously by Fidelity but never a redemption fees. At other brokerages I am aware of Fidelity funds are TF funds. Any insight?
With funds holding excessive %age of cash equivalents, we are paying them to hold cash which is far worse than neighborhood bank branches paying near zero interest on savings account.
ISTR selling Fidelity funds before the 30 day limit in my Fidelity brokerage account. These amounts were $2,000 or less, so maybe the small size of the transaction didn't get flagged by Fidelity.
"[Y]ou can use the same automatic investment mechanism that people use to buy TF funds for a $5 fee. If you use this to buy a Fidelity fund, then regardless of the amount, the transaction doesn't count as part of a round trip."
Since Fidelity funds are NTF, does Fidelity charge the $5 fees to buy using the auto invest feature? I am assuming NO, but thought I should ask.
"Orders placed via Fidelity Automatic Investments or Automatic Withdrawals features are exempt from roundtrip violations." - from Fidelity website.
Does the following sell order result in a roundtrip violation?
I buy $1,000 of FXAIX on Feb 1. On Feb 2, I place an auto invest request to buy on Feb 4 of $100K of FXAIX (assume quarterly auto invest). On Feb 15, I learn that a pandemic is imminent and I want to reduce my equity exposure and sell all the FXAIX shares bought on Feb 4.
For clarity: I mentioned the $5 automatic investment feature for transaction fee funds because some people are familiar with the tool in that context.
When used to purchase Fidelity funds (which have no TF) it exempts the purchase from the round trip restriction. My understanding is that the sequence of trades you described would be counted as one round trip (manual buy on Feb 1, sale on Feb 15). The sale of shares purchased on Feb 4 would not count as part of a round trip because they were purchased "automatically".
One round trip within a 90 day period is okay with Fidelity. Thus I believe you would not run afoul of Fidelity's excessive trading rules this way.
Thanks, @msf. I did not realize you replied until now when I looked for your earlier post on this topic. Sorry for not acknowledging your reply sooner.
After selling all or part of a mutual fund @ Fido, is there any restriction prohibiting purchasing that same fund again a day later?
I can think of 2 scenarios:
1) You’ve just sold a Fido fund (after holding it 31 days) …than buy it or add to it soon thereafter.
2) You’ve just sold a NTF fund you bought at Fido and held for 61 days … than buy it or add to it soon thereafter.
ISTM the answer to both is that you may do so without penalty. Since I served 90 days in their “penalty box” upon arrival, I’m not interested in testing any of this out.
Yes-for the risk-tolerant, FMSDX crushes the other two.
But I see it's holding 58+ % in equities. Its category is 30-50% in equities. But that's a M* creation, anyhow. Then whatever comparison numbers you're looking at over at M* will be skewed. By how much? Yes, it does look like a fine fund. Turnover looks scary. But yield is over 3%. I look for yield. FMSDX changed its stripes in 2019. Doing much better.
msf Not sure what fund hank was talking about, but if it's a Fidelity fund, I'm sure there are other similar Fidelity funds to replace it. FDGRX is the only irreplaceable fund, as Steven Wymer runs only that fund .
msf Not sure what fund hank was talking about, but if it's a Fidelity fund, I'm sure there are other similar Fidelity funds to replace it. FDGRX is the only irreplaceable fund, as Steven Wymer runs only that fund .
Here’s my earlier query to which @caerew388 graciously responded:
“After selling all or part of a mutual fund @ Fido, is there any restriction prohibiting purchasing that same fund again a day later?” I’m about 90% confident there is no such restriction, be it a Fido fund or other one (though the “other” fund’s prospectus might prohibit it.).
His worthy suggestion was to simply move the $$ into a different but similar fund, That’s pretty easily “doable”. I’m not the “fussy” type in fund selection (pure heresy here I suspect). And it’s already occurred to me that PRSIX (which I own) and TRRIX are very similar in construct and performance.
However, I am trying desperately not to become a “fund collector” and so prefer when possible to stay with the same funds. A call to Fido would resolve the question if push came to shove. They’re actually quite nice there. So hate to bother them w/o good cause.
+1 hank Yes-sticking with the same funds makes it more difficult. I myself don't mind churning through funds to make a profit. For example, I've owned funds like FTANX FFANX FASMX and FSANX at different times in my Fido IRA account, harvested profits, minimized losses and moved on to the next fund, when necessary.
Comments
https://www.tiaa.org/public/investment-performance/investment/profile?ticker=93570885
It's a fund of funds targeting a 20% allocation to underlying equity funds. Its current portfolio holds 19.86% in equities (per M*).
Its performance (raw or risk-adjusted) doesn't compare favorably to a target date retirement income fund like VTINX, let alone a 30%-50% fund like VWINX.
The fact that you're looking at the advisor class of shares rather than the retail class of shares (TSILX) suggests that this is being proposed for (or is already in) a managed portfolio. For that purpose, it's a serviceable fund, but nothing I'd get excited about.
Looks like a pretty good fund. The only thing that jumps out on a cursory look is that it is very deep into junk bonds - more than half are B rated, another nearly 10% below B.
But....FMSDX has a 3 year annual return of close to +17%, versus TSHIX at 12.5% and WBALX at 10.6%.
Fidelity has two different sets of policies. One on non-Fidelity mutual fund transactions and one on Fidelity fund transactions.
- Make too many (two) short term (within 30 days) round trip (buy, then sell) transactions on a single Fidelity fund in a single account within a 90 day span, and you may begin triggering restrictions on trading Fidelity funds.
http://personal.fidelity.com/products/trading/Trading_Platforms_Tools/excessive_trading_policies.shtml
This is Fidelity's excessive trading policy.
There are so many exceptions that if this is something you really want to do, it shouldn't be a problem. It doesn't apply to MMFs or reinvested divs. It doesn't apply to trades totaling less than $10K per day, as noted above. (The limit had been $1K, but was raised to $10K a year ago.)
Or you can use the same automatic investment mechanism that people use to buy TF funds for a $5 fee. If you use this to buy a Fidelity fund, then regardless of the amount, the transaction doesn't count as part of a round trip.
- Sell shares of a non-Fidelity NTF fund within 60 days of purchase and you will incur a short term trading (not early redemption) fee imposed by the brokerage. (The funds themselves may impose an additional early redemption fee; Fidelity funds do not.)
https://www.fidelity.com/mutual-funds/all-mutual-funds/fees
Unlike the excessive trading policy, which applies to Fidelity funds and is focused on the number of trades in a fund and not the shares, short term trading fees are focused on which shares you sell quickly.
Shares are treated FIFO, so this is also a relatively easy fee to avoid. If you purchase 100 shares in May, another 100 in July, and sell 100 in August, you will be fine. Even if you specifically identify the July shares as the ones you're selling.
I did quickly, and while the equity part of WBALX may be "solid", I question the performance of the bond portion in the current rising interest rate environment. It makes up 42% of the fund's portfolio, and of that 67% consists of short term US Treasuries and AAA bonds. It's the only balanced fund I have come across where the SEC dividend yield is negative, according to M*.
The majority of the fund's bonds may actually be a detractor from its future performance, unless management makes a change. Holding cash instead may actually be a better choice in the current environment.
My other question is why a "solid" fund like WBALX has accumulated only $223 million in assets over the past 18 years? What am I missing?
Fred
"[Y]ou can use the same automatic investment mechanism that people use to buy TF funds for a $5 fee. If you use this to buy a Fidelity fund, then regardless of the amount, the transaction doesn't count as part of a round trip."
Since Fidelity funds are NTF, does Fidelity charge the $5 fees to buy using the auto invest feature? I am assuming NO, but thought I should ask.
"Orders placed via Fidelity Automatic Investments or Automatic Withdrawals features are exempt from roundtrip violations." - from Fidelity website.
Does the following sell order result in a roundtrip violation?
I buy $1,000 of FXAIX on Feb 1. On Feb 2, I place an auto invest request to buy on Feb 4 of $100K of FXAIX (assume quarterly auto invest). On Feb 15, I learn that a pandemic is imminent and I want to reduce my equity exposure and sell all the FXAIX shares bought on Feb 4.
Thanks.
When used to purchase Fidelity funds (which have no TF) it exempts the purchase from the round trip restriction. My understanding is that the sequence of trades you described would be counted as one round trip (manual buy on Feb 1, sale on Feb 15). The sale of shares purchased on Feb 4 would not count as part of a round trip because they were purchased "automatically".
One round trip within a 90 day period is okay with Fidelity. Thus I believe you would not run afoul of Fidelity's excessive trading rules this way.
I can think of 2 scenarios:
1) You’ve just sold a Fido fund (after holding it 31 days) …than buy it or add to it soon thereafter.
2) You’ve just sold a NTF fund you bought at Fido and held for 61 days … than buy it or add to it soon thereafter.
ISTM the answer to both is that you may do so without penalty. Since I served 90 days in their “penalty box” upon arrival, I’m not interested in testing any of this out.
(Sorry if this has already been addressed)
Lacking a definitive answer, that’s the safest alternative. No need to do anything. Was just wondering.
Alternatively, TASHX is available NTF.
“After selling all or part of a mutual fund @ Fido, is there any restriction prohibiting purchasing that same fund again a day later?” I’m about 90% confident there is no such restriction, be it a Fido fund or other one (though the “other” fund’s prospectus might prohibit it.).
His worthy suggestion was to simply move the $$ into a different but similar fund, That’s pretty easily “doable”. I’m not the “fussy” type in fund selection (pure heresy here I suspect). And it’s already occurred to me that PRSIX (which I own) and TRRIX are very similar in construct and performance.
However, I am trying desperately not to become a “fund collector” and so prefer when possible to stay with the same funds. A call to Fido would resolve the question if push came to shove. They’re actually quite nice there. So hate to bother them w/o good cause.