Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Question about "The Index"
Old 06-16-2005, 04:47 PM   #1
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 140
Question about "The Index"

In my 403b I have Fidelity Equity Income (FEQIX). On the Fidelity site, it is comparing that fund to the Russell 3000 Value. Others that I have are compared to the Russell 2000 Value, the Russell 1000 Value and the Russell MidCap Value. How would they decide which index to compare to? My results for FEQIX are miserable compared to the index.

Period FEQIX Russell 3000 Value
1 Year 8.00% 15.44%
3 Year 5.42% 8.68%
5 Year 3.63% 6.05%
__________________

__________________
smooch is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Question about "The Index"
Old 06-16-2005, 05:03 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Question about "The Index"

Probably pretty arbitrary. They pick a style for the funds investments and then decide which index most closely follows that style. Sometimes an index is 'invented' to help benchmark a managed fund...for example there is a wellington and wellesley 'index' that vanguard has created by allocating certain equity and bond indexes by percentage.
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Question about "The Index"
Old 06-16-2005, 05:12 PM   #3
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Re: Question about "The Index"

Quote:
Originally Posted by smooch
In my 403b I have Fidelity Equity Income (FEQIX). On the Fidelity site, it is comparing that fund to the Russell 3000 Value. Others that I have are compared to the Russell 2000 Value, the Russell 1000 Value and the Russell MidCap Value. How would they decide which index to compare to? My results for FEQIX are miserable compared to the index.

Period FEQIX Russell 3000 Value
1 Year* 8.00%* * * * 15.44%
3 Year 5.42% 8.68%
5 Year* 3.63%* * * * * 6.05%
It's been about five years since we owned FEQIX, but doesn't that include a huge slug of bonds? *Is it possible that Fidelity is only comparing their stocks to the Russell 3000 value?

But you're right. *If you're not still adding DCA dollars, then an equivalent ETF could be a much cheaper way to replicate index performance.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Question about "The Index"
Old 06-16-2005, 07:49 PM   #4
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 140
Re: Question about "The Index"

The Fidelity site says:

Primarily invests at least 80% of its assets in income-producing equity securities, which tends to lead to investments in large cap "value" stocks. The fund may potentially invest in other types of equity and debt securities, including lower-quality debt securities. Lower-quality debt securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. The fund may invest in securities of domestic and foreign issuers.

Sounds lie they can't make up their mind what they invest in. This is part of my current 403(B), so I think I will allocate out of this fund.
__________________
smooch is offline   Reply With Quote
Re: Question about "The Index"
Old 06-18-2005, 07:06 AM   #5
Thinks s/he gets paid by the post
saluki9's Avatar
 
Join Date: Feb 2005
Posts: 2,032
Re: Question about "The Index"

I just checked in on my research software from work. It's best fit index is the Russell 1000 value (witha 98%+ R Squared)

It also has a negative alpha, so I don't see too much advantage to hanging on to it.

__________________
saluki9 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How to answer questions. ???With a question or assignment????? dex Forum Admin 2 02-25-2007 08:56 AM
Question About Friend's Expectation For His Widow's SS Benefit haha FIRE and Money 14 12-17-2006 10:35 PM
Question for the Men of all ages. My Dream Other topics 46 10-24-2006 11:21 PM
Tax question re moving $$ from one bucket the next. tednvon FIRE and Money 9 10-10-2005 08:57 AM
Social Security and Pension question guest FIRE and Money 31 06-24-2004 06:19 PM

 

 
All times are GMT -6. The time now is 02:50 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.