Fidelity Tech Sector Funds?

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WentzWagon
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Fidelity Tech Sector Funds?

Post by WentzWagon » Tue May 29, 2018 2:39 pm

I am looking to tilt a little bit in my Fidelity Taxable account and add some Tech Sector / Semi Conductor Funds.

Currently my make up is pretty much mostly the below between taxable and roth. No room in roth so will put in taxable. I think I will sell some of my FTIPX and VTEB

Fidelity Total US Index (FSTVX)
Fidelity Total Intl Index (FTIPX)
Fidelity Total Bond and some Vanguard Muni (FSITX & VTEB)

I was looking at thes fund/etfs and maybe wanting to put $20K-50K into them. Any thoughts on each?

Fidelity Select Technology Portfolio (FSPTX)- https://fundresearch.fidelity.com/mutua ... /316390202

FIDELITY MSCI INFORMATION TECHNOLOGY INDEX (FTEC) https://snapshot.fidelity.com/fidresear ... C&appCode=

Fidelity® Select Software and IT Services Portfolio (FSCSX) - https://fundresearch.fidelity.com/mutua ... /316390822

Fidelity® Select Semiconductors Portfolio (FSELX) - https://fundresearch.fidelity.com/mutua ... /316390863

Fidelity® Select IT Services Portfolio (FBSOX) - https://fundresearch.fidelity.com/mutua ... /316390483
Last edited by WentzWagon on Wed Jun 13, 2018 9:15 am, edited 1 time in total.

bloom2708
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Re: Fidelity Tech Sector Funds?

Post by bloom2708 » Tue May 29, 2018 2:52 pm

Those additions would be "tilting". Buying more of something you already own. You own all stocks at the market cap weight. US and International.

It doesn't increase diversity. You are making a bet that those 3 sector funds will add return.

You can do it, but not in the name of diversity. Or adding something new.
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WentzWagon
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Re: Fidelity Tech Sector Funds?

Post by WentzWagon » Tue May 29, 2018 2:55 pm

bloom2708 wrote:
Tue May 29, 2018 2:52 pm
Those additions would be "tilting". Buying more of something you already own. You own all stocks at the market cap weight. US and International.

It doesn't increase diversity. You are making a bet that those 3 sector funds will add return.

You can do it, but not in the name of diversity. Or adding something new.
Your right on this. I just want to Tilt a little towards that sector. I really like what FSPTX is composed of but it carries a .75 ER bs .1 of the FTEC which from the looks has outperformed the former.

bloom2708
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Re: Fidelity Tech Sector Funds?

Post by bloom2708 » Tue May 29, 2018 3:19 pm

That ER is high. I would look at it, think about it, daydream about it and then stick with the market cap weighting.

It is very hard to stick with tilts that under perform. You want it when tech is zooming. You want out when tech is getting clobbered.

Don't just do something. Stand there.
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WentzWagon
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Re: Fidelity Tech Sector Funds?

Post by WentzWagon » Tue May 29, 2018 3:47 pm

bloom2708 wrote:
Tue May 29, 2018 3:19 pm
That ER is high. I would look at it, think about it, daydream about it and then stick with the market cap weighting.

It is very hard to stick with tilts that under perform. You want it when tech is zooming. You want out when tech is getting clobbered.

Don't just do something. Stand there.
What do you mean by "stick with the market cap weighting."

bloom2708
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Re: Fidelity Tech Sector Funds?

Post by bloom2708 » Tue May 29, 2018 3:51 pm

WentzWagon wrote:
Tue May 29, 2018 3:47 pm
bloom2708 wrote:
Tue May 29, 2018 3:19 pm
That ER is high. I would look at it, think about it, daydream about it and then stick with the market cap weighting.

It is very hard to stick with tilts that under perform. You want it when tech is zooming. You want out when tech is getting clobbered.

Don't just do something. Stand there.
What do you mean by "stick with the market cap weighting."
You buy more of Total US and Total International. Those indexes own everything at the market cap weight (shares outstanding x price).

Buy more of those 2 funds instead of adding something else for more return or diversity.

If there was only 3 stocks, the index would own all 3 at the stack ranking 40% 1, 30% 2, 30% 3. When you buy the index you buy all 3. You are proposing buying a fund with #3 in it. Over simplification, but I think you get the idea.
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CnC
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Re: Fidelity Tech Sector Funds?

Post by CnC » Tue May 29, 2018 11:56 pm

I did it and the returns have been pretty crazy. I think last time I looked 20-25% returns.

But, despite those monster returns I can't make myself put more money in to try and Chase better returns.


I say ±10% of your stock investments can be play money the other 90% should be market indexed.

Then of it ever grows to 20% think to yourself see I could be the next buffet and sell back down to 10% invest the remainder in the index and try again.

If you manage to do that 3 or 4 times in a row you might really be on to something. So far my 10% hasn't gotten below 7% nor above 15% since I pick 1 big loser for every 3 winners.

WentzWagon
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Re: Fidelity Tech Sector Funds?

Post by WentzWagon » Fri Jun 01, 2018 8:58 am

CnC wrote:
Tue May 29, 2018 11:56 pm
I did it and the returns have been pretty crazy. I think last time I looked 20-25% returns.

But, despite those monster returns I can't make myself put more money in to try and Chase better returns.


I say ±10% of your stock investments can be play money the other 90% should be market indexed.

Then of it ever grows to 20% think to yourself see I could be the next buffet and sell back down to 10% invest the remainder in the index and try again.

If you manage to do that 3 or 4 times in a row you might really be on to something. So far my 10% hasn't gotten below 7% nor above 15% since I pick 1 big loser for every 3 winners.
Which one did you buy? FSPTX or FTEC?

I bought about 10K of FTEC the other day and might drop a little more in. The low ER ratio and past performance has been better the FSPTX in the long run even thought future performance is unknown :)

anil686
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Re: Fidelity Tech Sector Funds?

Post by anil686 » Fri Jun 01, 2018 9:28 am

I understand the tilting but sector funds too mean revert. I guess if you are committed to it - it may work out well for you. Have you looked at the Nasdaq index fund through Fidelity? It only has a 0.20% ER or QQQ ETF? Both are heavily slanted to tech and biotech, have a lower ER and are relatively more tax efficient in a taxable account. JMO though...

new2bogle
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Re: Fidelity Tech Sector Funds?

Post by new2bogle » Fri Jun 01, 2018 9:59 am

anil686 wrote:
Fri Jun 01, 2018 9:28 am
I understand the tilting but sector funds too mean revert. I guess if you are committed to it - it may work out well for you. Have you looked at the Nasdaq index fund through Fidelity? It only has a 0.20% ER or QQQ ETF? Both are heavily slanted to tech and biotech, have a lower ER and are relatively more tax efficient in a taxable account. JMO though...
The net ER on FTEC is 0.084 which is pretty low I think.

I went through the same mental exercise as OP in Feb/March timeframe of this year and decided NOT to buy it because I didn't want to tilt to tech sector. Now, looking at the returns I could have had, I am kicking myself!

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midareff
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Re: Fidelity Tech Sector Funds?

Post by midareff » Fri Jun 01, 2018 12:24 pm

If this is going to be in a taxable account I would not bother. FWIW, my primary portfolio is at VG and is very Bogleish, with Total US, Total International, IT Munis in taxable and Total US, Total International and Corporate Bonds in Tax-ex. I also have a small portfolio in a Roth account at Fidelity which I used as a play account while leaving the VG account, after retirement near 7 years ago, virtually alone except for scheduled withdrawals.

In the Roth I have held a variety of Fidelity Funds from time to time .. Health.. Tech... Mid Cap... EM.. Em Bonds.... and so forth. Whether the results are due to pure luck, intuition, skill or whatever I have no idea, but I have outperformed the S&P Index for quite awhile in this account. I used to call it pure luck but lately I'm not so sure since some of this can be quantitatively analyzed. Sixteen months ago I started to keep better records of the Roth as it pertained to the rest of my portfolio. It was 5.8% of Total Port (2 comma club) at that time and my annual Roth conversions had stopped. It is now 6.8% of Total Port despite being subject to a 5.5% WR, while the rest of the Port's WR is much lower.

Over time the Fido Sector Funds can be quite volatile, even constitution testing so expect strong ups and downs. What may be hot for a few quarters may be dead or strongly down the next several months or even years. While there is a chance you could generate Alpha over the S&P Index or Total Market there is also a chance you get have your head on a plate delivered to U, perhaps even on the end of a spear. That said, I believe over time you can generate Alpha but must be willing to be nimble, willing to change funds quickly and have the assets in a tax-ex portfolio so you are not generating tax liability. In addition to that you must be willing and able to keep records on a weekly and monthly basis which can be extremely cumbersome if you are working with family. I am retired and have the time to play with this, so it's not something for all. If you want more PM me.

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tennisplyr
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Re: Fidelity Tech Sector Funds?

Post by tennisplyr » Fri Jun 01, 2018 7:07 pm

I've held Fidelity Select Software and IT for over 10 years and has shown annual increases of 16% +. So far, so good.
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WentzWagon
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Re: Fidelity Tech Sector Funds?

Post by WentzWagon » Wed Jun 13, 2018 9:16 am

I updated some of the ones I am looking at in original post. FTEC looks good and has low ER but looks like the others over past 5 years are growing more exponentially

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CyclingDuo
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Re: Fidelity Tech Sector Funds?

Post by CyclingDuo » Wed Jun 13, 2018 9:46 am

WentzWagon wrote:
Tue May 29, 2018 2:39 pm
I am looking to tilt a little bit in my Fidelity Taxable account and add some Tech Sector / Semi Conductor Funds.

Fidelity® Select Software and IT Services Portfolio (FSCSX) - https://fundresearch.fidelity.com/mutua ... /316390822

Fidelity® Select Semiconductors Portfolio (FSELX) - https://fundresearch.fidelity.com/mutua ... /316390863
We have had both of these funds in our IRA's for over 20 years. Sold FSELX early last year to rebalance into more diverse index funds within the IRA's as we have plenty of semiconductor investment in our taxable account, but have kept FSCSX as it has been such a stellar performer and is such an important growth space category. Well worth the .73% ER fee - in our opinion, and they do a better job of diversity in that sector than we feel we could do on our own. Having held it through both the 2000-02 dump, and 2007-2009 dump - suffice it to say it will decline more than the S&P 500 in those bear market cycles, but that is to be expected. It has made up for it in the other time frames.
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WentzWagon
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Re: Fidelity Tech Sector Funds?

Post by WentzWagon » Wed Jun 13, 2018 9:53 am

CyclingDuo wrote:
Wed Jun 13, 2018 9:46 am
WentzWagon wrote:
Tue May 29, 2018 2:39 pm
I am looking to tilt a little bit in my Fidelity Taxable account and add some Tech Sector / Semi Conductor Funds.

Fidelity® Select Software and IT Services Portfolio (FSCSX) - https://fundresearch.fidelity.com/mutua ... /316390822

Fidelity® Select Semiconductors Portfolio (FSELX) - https://fundresearch.fidelity.com/mutua ... /316390863
We have had both of these funds in our IRA's for over 20 years. Sold FSELX early last year to rebalance into more diverse index funds within the IRA's as we have plenty of semiconductor investment in our taxable account, but have kept FSCSX as it has been such a stellar performer and is such an important growth space category. Well worth the .73% ER fee - in our opinion, and they do a better job of diversity in that sector than we feel we could do on our own. Having held it through both the 2000-02 dump, and 2007-2009 dump - suffice it to say it will decline more than the S&P 500 in those bear market cycles, but that is to be expected. It has made up for it in the other time frames.
FSCSX looks very similar in composition to FTEC upon a quick glance without the ER.

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