Customer Reviews

What Every Fidelity Investor Needs to Know

5 star:		(0)
4 star:		(2)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

James Lowell has spent many years analyzing Fidelity funds for his well-known website and newsletter. In this 338-page, twenty chapter book, the author tells you everything you ever wanted to know about Fidelity funds from their inception through current times. Part One of the book begins with the basics including the history of the firm, and then covers the mechanics of opening an account accompanied by a description of the fees and charges involved. Next, in separate chapters the author covers how to read the Fidelity monthly statement and how to master their online site.

Part Two first reviews retirement planning (IRAs, 401(k)s, 529s, UTMAs/UGMAs), a generic description of mutual funds, and then a five-page barebones chapter on charitable giving, including trust and estate planning.

Part Three, composed of eleven chapters, is by far the heart of the book. It covers all the Fidelity fund categories (e.g., growth, international, sector, money market, bond, Advisor funds, variable annuity, and index funds). Lowell devotes a paragraph to each fund in each of the categories. Interestingly, he doesn't mention funds that are closed to new investors.

He includes scatter diagrams of the fund categories of risk vs. return, but all the diagrams are too small to read. Also, included is a correlation matrix of growth funds compared to other funds, sector funds compared to each other, bond funds compared to each other, and Fidelity Advisor funds compared to one another. Again a two-page matrix would have been much more readable.

Lowell is a proponent of buying the "fund manager" not the fund, since he believes that fund management is the most important determinant of fund performance for diversified funds. Chapter 7 in Part Three is devoted to the importance of the fund manager, since individual managers run most funds rather than teams which is common at American Funds, for example.

Lowell provides a five-page table showing the management tenure for each fund since inception with a listing of the manager name and period managed. The date of this data table is not provided, but I assume it was around April 2006. To help investors determine a manager's performance record, the author provides quantitative data in table format measuring risk-adjusted relative returns, and other relative returns over various periods. Unfortunately, the small font size used (printed on only 1.25 pages) requires a magnifying glass to read. Considering the importance of the data to making mutual fund decisions, it should have been printed horizontally on four pages.

Appendix C is provided which lists the 114 Fidelity Fund Managers. This 19-page appendix alphabetically lists the fund managers with their college degrees, which funds they currently manage and prior fund management at Fidelity with dates and any prior employment. This appendix is not that useful information, since all managers have college or master degrees and there is no data correlating manager performance to educational background. It is interesting to note how many managers Fidelity recruits out of college or after receiving their MBA or Ph.D. Interestingly, only 5 out 114 managers have received their CFA designation, certainly not an impressive statistic.

Part Four covers three sample diversified model portfolios, chasing hot funds, and Fidelity's top stock holdings list as of 3/31/06. This list is not useful, since it is at least nine months old by the time an individual gets this book which was published in December 2006.

The end of the book contains glossaries and a few appendices. Included is an 11-page glossary of generic investment terms supplemented by a four-page glossary of Fidelity related terms

Appendix A 9 pages long lists all Fidelity's Investor Centers across the country by State, then city with address and phone number. This was nice to include, but not really necessary with the availability of 800 numbers and Fidelity online.

Appendix B contains a 2002 interview by Lowell with Peter Lynch, legendary Fidelity Magellan fund manager and currently vice chairman of Fidelity Investments. There are good insights on investing by Lynch which will stand the test of time.

Overall, Lowell provides a readable, organized treatise on Fidelity funds. New Fidelity investors and current investors who want to know all that Fidelity offers will benefit from reading this book.

Informative Writings with good data & thoughful analysis.
Charts & Graph while readable the font size is too small.