Comments on: Getting rid of FIREX and a letter from Fidelity http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/ Personal finance and investing in mutual funds and ETFs Wed, 31 Aug 2011 13:13:14 +0000 hourly 1 http://wordpress.org/?v=3.1.3 By: indexfundfan @ indextown » Sell mutual fund with short term CG after distributions http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/comment-page-1/#comment-3114 indexfundfan @ indextown » Sell mutual fund with short term CG after distributions Sat, 10 Feb 2007 01:22:32 +0000 http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/#comment-3114 [...] Sell mutual fund with short term CG after distributions When I was liquidating my FIREX holding last year, an interesting observation came to my mind. If an investor, for whatever reason, needs to liquidate a substantial position with short term capital gains, and there is a fund distribution coming up, it makes sense to find out (whenever possible) the nature of the fund distribution — whether it is mostly short-term CG (capital gain), long-term CG or qualified income distribution. [...] [...] Sell mutual fund with short term CG after distributions When I was liquidating my FIREX holding last year, an interesting observation came to my mind. If an investor, for whatever reason, needs to liquidate a substantial position with short term capital gains, and there is a fund distribution coming up, it makes sense to find out (whenever possible) the nature of the fund distribution — whether it is mostly short-term CG (capital gain), long-term CG or qualified income distribution. [...]

]]> By: Indexfundfan @ Indextown » International Real Estate ETF launched http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/comment-page-1/#comment-718 Indexfundfan @ Indextown » International Real Estate ETF launched Thu, 21 Dec 2006 01:46:43 +0000 http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/#comment-718 [...] I had previously invested in the Fidelity International Real Estate fund (FIREX) but got rid of it for its very poor tax efficiency. Hopefully, this ETF would prove to be a better vehicle for a taxable account. [...] [...] I had previously invested in the Fidelity International Real Estate fund (FIREX) but got rid of it for its very poor tax efficiency. Hopefully, this ETF would prove to be a better vehicle for a taxable account. [...]

]]> By: Indexfundfan @ Indextown » My healthcare equity allocation http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/comment-page-1/#comment-425 Indexfundfan @ Indextown » My healthcare equity allocation Mon, 06 Nov 2006 19:29:07 +0000 http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/#comment-425 [...] FSHCX : Fidelity’s Healthcare delivery fund concentrates on healthcare delivery companies. This fund has an expense ratio of 0.95% and, is particularly attractive to me since it represents the best hedge against rising healthcare insurance. But, in my opinion this fund seems to have the high turnover rates that are typical of so many Fidelity funds (see other story here on the 234% turnover rate in the Fidelity International Real Estate fund). The turnover rate for this fund is 106%. Other mutual funds I looked at included ALSIX and FSPHX. [...] [...] FSHCX : Fidelity’s Healthcare delivery fund concentrates on healthcare delivery companies. This fund has an expense ratio of 0.95% and, is particularly attractive to me since it represents the best hedge against rising healthcare insurance. But, in my opinion this fund seems to have the high turnover rates that are typical of so many Fidelity funds (see other story here on the 234% turnover rate in the Fidelity International Real Estate fund). The turnover rate for this fund is 106%. Other mutual funds I looked at included ALSIX and FSPHX. [...]

]]> By: indexfundfan http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/comment-page-1/#comment-289 indexfundfan Wed, 11 Oct 2006 19:18:41 +0000 http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/#comment-289 Hi Barry, thanks for the note on how to uncover shareholder turnover. I think I should be more patient and observe longer when SSgA's international real estate fund comes out. Hi Barry, thanks for the note on how to uncover shareholder turnover. I think I should be more patient and observe longer when SSgA’s international real estate fund comes out.

]]> By: Barry Barnitz http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/comment-page-1/#comment-285 Barry Barnitz Wed, 11 Oct 2006 16:11:12 +0000 http://www.indextown.com/archives/2006/10/05/getting-rid-of-firex-and-a-letter-from-fidelity/#comment-285 Hi: A simple metric for uncovering shareholder turnover in a fund is to compute two very simple ratios. The first ratio measures shareholder turnover: the Redemptions/Average Net Asset (R/ANA) ratio. You can get the annual fund redemptions number from the financial reporting (and footnotes) of the annual report. A workable ANA number can be derived from averaging easily attained net asset figures from the annual and seminannual reports, which will give you three data points-- beginning, mid, and year end assets (inorder to have a strictly "accurate" ANA you would have to manually track monthly net assets; the three point average will be a workable estimate). If you take the reciprocal of the R/ANA you will get the average shareholder holding period for the fund. A second ratio, the Redemption/Sales ratio, also derived from end of year accounting data, can help you understand fund flows. A ratio above 1 indicates net redemption of the fund. A ratio below 1 indicates net investment in the fund. If the R/ANA ratio is high, say 200%+ and the R/S ratio is very close to 1, you have a strong indication that the fund is being market timed by shareholders. What is needed for the International REIT asset class is a retail index fund. SSGA has filed for an International REIT ETF; you can refer to the preliminary prospectus linked in my post <a href="http://financialpage.blogspot.com/2006/10/state-street-global-to-offer.html" rel="nofollow">SSGA to Offer International ETFS</a> Hi:

A simple metric for uncovering shareholder turnover in a fund is to compute two very simple ratios. The first ratio measures shareholder turnover: the Redemptions/Average Net Asset (R/ANA) ratio. You can get the annual fund redemptions number from the financial reporting (and footnotes) of the annual report. A workable ANA number can be derived from averaging easily attained net asset figures from the annual and seminannual reports, which will give you three data points– beginning, mid, and year end assets (inorder to have a strictly “accurate” ANA you would have to manually track monthly net assets; the three point average will be a workable estimate). If you take the reciprocal of the R/ANA you will get the average shareholder holding period for the fund.

A second ratio, the Redemption/Sales ratio, also derived from end of year accounting data, can help you understand fund flows. A ratio above 1 indicates net redemption of the fund. A ratio below 1 indicates net investment in the fund. If the R/ANA ratio is high, say 200%+ and the R/S ratio is very close to 1, you have a strong indication that the fund is being market timed by shareholders.

What is needed for the International REIT asset class is a retail index fund. SSGA has filed for an International REIT ETF; you can refer to the preliminary prospectus linked in my post SSGA to Offer International ETFS

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