FDGRX - Growth Fund vs. SP500

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BV3273
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FDGRX - Growth Fund vs. SP500

Post by BV3273 » Tue Apr 21, 2020 5:34 pm

Hello,

I was reviewing some info in my 401k and started looking into the large cap funds. The bulk of my investments in my 401k and elsewhere are geared heavily towards the S&P 500.

I checked on a fund that’s available which ticker is FDGRX. It is a Fidelity Growth Commingled Pool. ER is 0.83, but returns look much more attractive than the plain old S&P fund I’m holding.

Should I switch part of my funds over to this? Should I switch it all over? I’m willing to pay a higher ER for better returns.

Thanks,
BV

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anon_investor
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Re: FDGRX - Growth Fund vs. SP500

Post by anon_investor » Tue Apr 21, 2020 5:38 pm

BV3273 wrote:
Tue Apr 21, 2020 5:34 pm
Hello,

I was reviewing some info in my 401k and started looking into the large cap funds. The bulk of my investments in my 401k and elsewhere are geared heavily towards the S&P 500.

I checked on a fund that’s available which ticker is FDGRX. It is a Fidelity Growth Commingled Pool. ER is 0.83, but returns look much more attractive than the plain old S&P fund I’m holding.

Should I switch part of my funds over to this? Should I switch it all over? I’m willing to pay a higher ER for better returns.

Thanks,
BV
No... don't do it! Seriously just stick with the S&P500.

Edit: there is nothing to guarantee that fund will out perform the S&P500 going forward.

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Wiggums
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Re: FDGRX - Growth Fund vs. SP500

Post by Wiggums » Tue Apr 21, 2020 5:40 pm

It is a large cap growth fund that is overweight in IT and consumer discretionary with ER of 0.83%. It could outperform since the crisis or not. That ER is way too high for my taste.

MotoTrojan
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Re: FDGRX - Growth Fund vs. SP500

Post by MotoTrojan » Tue Apr 21, 2020 5:41 pm

Buying what has done well recently is a good way to lose in the long run. When I look at the same discrepancy you are looking at, it makes me want to take the opposite trade and buy value funds (which have done far worse than the S&P500 lately, but over many decades have outperformed).

But I don't market time and tilt to value regardless of whether it is doing well or growth is... makes life easier.

If you did want to tilt to growth then I would use an index and avoid the high expense ratio and active-fund risk.

theorist
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Re: FDGRX - Growth Fund vs. SP500

Post by theorist » Tue Apr 21, 2020 5:43 pm

You will likely get a lot of advice about how reversion to the mean will cause the fund to underperform, eventually. This could well be true. But it has a fine extended record under the same manager who is there at present, and has been closed for some time — so performing well with the same rough amount in holdings that it presently has. (This is important, as some formerly well performing funds get killed by asset bloat, especially if their success is built on small or mid cap holdings.)

It isn’t precisely comparable to S&P 500 as it is large growth, not large blend. It has outperformed the Vanguard growth index over 1,3,5, and 10 year periods. In general growth has done very well recently. This would normally be a reason to avoid it :-).

I’d consider putting a small fraction of my equities into it. Say 20% of what you have in the S&P 500. I’d keep it capped both because you have to worry about mean reversion, but also because a large growth tilt is dangerous. I personally hold a small amount of Vanguard’s growth index (much lower ER), but overall, I tilt to value.
Last edited by theorist on Tue Apr 21, 2020 5:45 pm, edited 1 time in total.

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1789
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Re: FDGRX - Growth Fund vs. SP500

Post by 1789 » Tue Apr 21, 2020 5:45 pm

BV3273 wrote:
Tue Apr 21, 2020 5:34 pm
Hello,

I was reviewing some info in my 401k and started looking into the large cap funds. The bulk of my investments in my 401k and elsewhere are geared heavily towards the S&P 500.

I checked on a fund that’s available which ticker is FDGRX. It is a Fidelity Growth Commingled Pool. ER is 0.83, but returns look much more attractive than the plain old S&P fund I’m holding.

Should I switch part of my funds over to this? Should I switch it all over? I’m willing to pay a higher ER for better returns.

Thanks,
BV
I have seen Fido put that one fund for a lot of 401k' s including mine too. I am not sure how they decide with the company crew. Anyway, it is large cap growth and did well last decade. Hard to say what will happen in the future. Do you have a brokeragelink in 401k? If so, maybe you can buy a similar fund a lot cheaper like MGK or something like that. This is NOT something i recommend, i am just trying to help you not to pay that high ER = 0.83% if you like to add some large cap groth. I personally put all my investments in my 401k to SP500 fund (100%). Good luck
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

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BV3273
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Re: FDGRX - Growth Fund vs. SP500

Post by BV3273 » Tue Apr 21, 2020 7:12 pm

Thanks all! I am going to stay just with the S&P 500 fund that is available to me. The expense ratio is only 0.0135.

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BV3273
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Re: FDGRX - Growth Fund vs. SP500

Post by BV3273 » Tue Apr 21, 2020 7:15 pm

1789 wrote:
Tue Apr 21, 2020 5:45 pm
BV3273 wrote:
Tue Apr 21, 2020 5:34 pm
Hello,

I was reviewing some info in my 401k and started looking into the large cap funds. The bulk of my investments in my 401k and elsewhere are geared heavily towards the S&P 500.

I checked on a fund that’s available which ticker is FDGRX. It is a Fidelity Growth Commingled Pool. ER is 0.83, but returns look much more attractive than the plain old S&P fund I’m holding.

Should I switch part of my funds over to this? Should I switch it all over? I’m willing to pay a higher ER for better returns.

Thanks,
BV
I have seen Fido put that one fund for a lot of 401k' s including mine too. I am not sure how they decide with the company crew. Anyway, it is large cap growth and did well last decade. Hard to say what will happen in the future. Do you have a brokeragelink in 401k? If so, maybe you can buy a similar fund a lot cheaper like MGK or something like that. This is NOT something i recommend, i am just trying to help you not to pay that high ER = 0.83% if you like to add some large cap groth. I personally put all my investments in my 401k to SP500 fund (100%). Good luck
I just have Fido net benefits. ER is actually 0.43. Not that it matters lol. I really like the past performance of this fund.

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Re: FDGRX - Growth Fund vs. SP500

Post by pkcrafter » Tue Apr 21, 2020 7:44 pm

BV3273 wrote:
Tue Apr 21, 2020 7:15 pm
1789 wrote:
Tue Apr 21, 2020 5:45 pm
BV3273 wrote:
Tue Apr 21, 2020 5:34 pm
Hello,

I was reviewing some info in my 401k and started looking into the large cap funds. The bulk of my investments in my 401k and elsewhere are geared heavily towards the S&P 500.

I checked on a fund that’s available which ticker is FDGRX. It is a Fidelity Growth Commingled Pool. ER is 0.83, but returns look much more attractive than the plain old S&P fund I’m holding.

Should I switch part of my funds over to this? Should I switch it all over? I’m willing to pay a higher ER for better returns.

Thanks,
BV
I have seen Fido put that one fund for a lot of 401k' s including mine too. I am not sure how they decide with the company crew. Anyway, it is large cap growth and did well last decade. Hard to say what will happen in the future. Do you have a brokeragelink in 401k? If so, maybe you can buy a similar fund a lot cheaper like MGK or something like that. This is NOT something i recommend, i am just trying to help you not to pay that high ER = 0.83% if you like to add some large cap groth. I personally put all my investments in my 401k to SP500 fund (100%). Good luck
I just have Fido net benefits. ER is actually 0.43. Not that it matters lol. I really like the past performance of this fund.
I think you should add it your portfolio, but not totally replace S&P 500. Maybe 30-40% FDGRX.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

prairieman
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Re: FDGRX - Growth Fund vs. SP500

Post by prairieman » Tue Apr 21, 2020 7:50 pm

We have made a killing with this fund in the last decade. It is my favorite fund in our portfolio and, though there is no guarantee for future performances, it is my one indulgence for paying a high annual fee.

Topic Author
BV3273
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Re: FDGRX - Growth Fund vs. SP500

Post by BV3273 » Tue Apr 21, 2020 7:51 pm

prairieman wrote:
Tue Apr 21, 2020 7:50 pm
We have made a killing with this fund in the last decade. It is my favorite fund in our portfolio and, though there is no guarantee for future performances, it is my one indulgence for paying a high annual fee.
Will you continue to hold it?

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anon_investor
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Re: FDGRX - Growth Fund vs. SP500

Post by anon_investor » Tue Apr 21, 2020 7:56 pm

prairieman wrote:
Tue Apr 21, 2020 7:50 pm
We have made a killing with this fund in the last decade. It is my favorite fund in our portfolio and, though there is no guarantee for future performances, it is my one indulgence for paying a high annual fee.
How has it done vs. a low cost growth index ETF like VUG or MGK?

Topic Author
BV3273
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Re: FDGRX - Growth Fund vs. SP500

Post by BV3273 » Tue Apr 21, 2020 8:17 pm

anon_investor wrote:
Tue Apr 21, 2020 7:56 pm
prairieman wrote:
Tue Apr 21, 2020 7:50 pm
We have made a killing with this fund in the last decade. It is my favorite fund in our portfolio and, though there is no guarantee for future performances, it is my one indulgence for paying a high annual fee.
How has it done vs. a low cost growth index ETF like VUG or MGK?
Outperformed both by a few percent in 1, 3, 5, and 10 year periods.

prairieman
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Re: FDGRX - Growth Fund vs. SP500

Post by prairieman » Tue Apr 21, 2020 9:39 pm

BV3273 wrote:
Tue Apr 21, 2020 7:51 pm
prairieman wrote:
Tue Apr 21, 2020 7:50 pm
We have made a killing with this fund in the last decade. It is my favorite fund in our portfolio and, though there is no guarantee for future performances, it is my one indulgence for paying a high annual fee.
Will you continue to hold it?
Yes.

justsomeguy2018
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Re: FDGRX - Growth Fund vs. SP500

Post by justsomeguy2018 » Tue Apr 21, 2020 10:06 pm

BV3273 wrote:
Tue Apr 21, 2020 7:12 pm
Thanks all! I am going to stay just with the S&P 500 fund that is available to me. The expense ratio is only 0.0135.
What about Fidelity® Large Cap Growth Index Fund (FSPGX)? The ER is only .035%.

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1789
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Re: FDGRX - Growth Fund vs. SP500

Post by 1789 » Tue Apr 21, 2020 10:51 pm

BV3273 wrote:
Tue Apr 21, 2020 7:15 pm
1789 wrote:
Tue Apr 21, 2020 5:45 pm
BV3273 wrote:
Tue Apr 21, 2020 5:34 pm
Hello,

I was reviewing some info in my 401k and started looking into the large cap funds. The bulk of my investments in my 401k and elsewhere are geared heavily towards the S&P 500.

I checked on a fund that’s available which ticker is FDGRX. It is a Fidelity Growth Commingled Pool. ER is 0.83, but returns look much more attractive than the plain old S&P fund I’m holding.

Should I switch part of my funds over to this? Should I switch it all over? I’m willing to pay a higher ER for better returns.

Thanks,
BV
I have seen Fido put that one fund for a lot of 401k' s including mine too. I am not sure how they decide with the company crew. Anyway, it is large cap growth and did well last decade. Hard to say what will happen in the future. Do you have a brokeragelink in 401k? If so, maybe you can buy a similar fund a lot cheaper like MGK or something like that. This is NOT something i recommend, i am just trying to help you not to pay that high ER = 0.83% if you like to add some large cap groth. I personally put all my investments in my 401k to SP500 fund (100%). Good luck
I just have Fido net benefits. ER is actually 0.43. Not that it matters lol. I really like the past performance of this fund.
I get it. Past performance will not tell anything really. But assuming you believe in it, my question is still valid. Do you have a brokeragelink in your 401k? If so i will tell you a fund you will like more because it outperformed SP500 for 30 years. Why not pick that one then?
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

Topic Author
BV3273
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Re: FDGRX - Growth Fund vs. SP500

Post by BV3273 » Wed Apr 22, 2020 7:14 am

1789 wrote:
Tue Apr 21, 2020 10:51 pm
BV3273 wrote:
Tue Apr 21, 2020 7:15 pm
1789 wrote:
Tue Apr 21, 2020 5:45 pm
BV3273 wrote:
Tue Apr 21, 2020 5:34 pm
Hello,

I was reviewing some info in my 401k and started looking into the large cap funds. The bulk of my investments in my 401k and elsewhere are geared heavily towards the S&P 500.

I checked on a fund that’s available which ticker is FDGRX. It is a Fidelity Growth Commingled Pool. ER is 0.83, but returns look much more attractive than the plain old S&P fund I’m holding.

Should I switch part of my funds over to this? Should I switch it all over? I’m willing to pay a higher ER for better returns.

Thanks,
BV
I have seen Fido put that one fund for a lot of 401k' s including mine too. I am not sure how they decide with the company crew. Anyway, it is large cap growth and did well last decade. Hard to say what will happen in the future. Do you have a brokeragelink in 401k? If so, maybe you can buy a similar fund a lot cheaper like MGK or something like that. This is NOT something i recommend, i am just trying to help you not to pay that high ER = 0.83% if you like to add some large cap groth. I personally put all my investments in my 401k to SP500 fund (100%). Good luck
I just have Fido net benefits. ER is actually 0.43. Not that it matters lol. I really like the past performance of this fund.
I get it. Past performance will not tell anything really. But assuming you believe in it, my question is still valid. Do you have a brokeragelink in your 401k? If so i will tell you a fund you will like more because it outperformed SP500 for 30 years. Why not pick that one then?
I do not have brokeragelink.

Topic Author
BV3273
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Re: FDGRX - Growth Fund vs. SP500

Post by BV3273 » Wed Apr 22, 2020 7:15 am

justsomeguy2018 wrote:
Tue Apr 21, 2020 10:06 pm
BV3273 wrote:
Tue Apr 21, 2020 7:12 pm
Thanks all! I am going to stay just with the S&P 500 fund that is available to me. The expense ratio is only 0.0135.
What about Fidelity® Large Cap Growth Index Fund (FSPGX)? The ER is only .035%.
Still beat it.

whereskyle
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Re: FDGRX - Growth Fund vs. SP500

Post by whereskyle » Wed Apr 22, 2020 9:29 am

BV3273 wrote:
Tue Apr 21, 2020 5:34 pm
Hello,

I was reviewing some info in my 401k and started looking into the large cap funds. The bulk of my investments in my 401k and elsewhere are geared heavily towards the S&P 500.

I checked on a fund that’s available which ticker is FDGRX. It is a Fidelity Growth Commingled Pool. ER is 0.83, but returns look much more attractive than the plain old S&P fund I’m holding.

Should I switch part of my funds over to this? Should I switch it all over? I’m willing to pay a higher ER for better returns.

Thanks,
BV
1. The ER is too high given the lack of certainty about continued outperformance. You could underperform and pay more to do it.
2. Selling out of the S&P 500 after a period of underperformance is the equivalent of selling low. Buying an overpriced growth fund after a period of outperformance is the equivalent of buying high.
3. Your S&P 500 fund will reflect growth's outperformance if it continues as market cap fluctuates. You will not miss out going forward as much as you might think.
4. If you really want to bet on growth, do it with some play money, not your retirement. I do just that with VUG, which carries an ER of .04. That's more than 20 times cheaper than the fund you listed.
5. Stay the course! I think Bogle understood that people are inevitably going to seek to outperform the market. That's why he encouraged us to do it safely. That means limiting play money to 5%. If it does really well, why not let it grow to 10%? But don't spoil your retirement in a short-term chase for outperformance. Stay the course!
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

infotrader
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Re: FDGRX - Growth Fund vs. SP500

Post by infotrader » Wed Apr 22, 2020 9:39 am

I would replace SNP500 with FDGRX.
I have the UC version of it, and found it less volatile than SNP500.
The fund is a separate account invested in the Fidelity® Growth Company Commingled Pool Class 2
https://myucretirement.com/Managed/Asse ... 20FUND.pdf

infotrader
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Re: FDGRX - Growth Fund vs. SP500

Post by infotrader » Wed Apr 22, 2020 9:48 am

anon_investor wrote:
Tue Apr 21, 2020 7:56 pm
prairieman wrote:
Tue Apr 21, 2020 7:50 pm
We have made a killing with this fund in the last decade. It is my favorite fund in our portfolio and, though there is no guarantee for future performances, it is my one indulgence for paying a high annual fee.
How has it done vs. a low cost growth index ETF like VUG or MGK?
I actually have MGK in my vanguard account to mimic it, less stellar though.

prairieman
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Re: FDGRX - Growth Fund vs. SP500

Post by prairieman » Wed Apr 22, 2020 2:00 pm

Yes, year after year it has done well. I am not savvy for owning it, just lucky to have dumbed into it before becoming mostly an indexer. I feel it’s like paying a bit up front to gamble with loaded dice.

nix4me
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Re: FDGRX - Growth Fund vs. SP500

Post by nix4me » Wed Apr 22, 2020 2:13 pm

I used a growth fund in my Fidelity 401k for the past 18 years and let’s just say it was worth every pennny of the higher ER. No idea what will happen in the future.

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Re: FDGRX - Growth Fund vs. SP500

Post by nisiprius » Wed Apr 22, 2020 2:13 pm

It is a mistake to compare return without making some attempt to take risk into account as well. Now, just to be clear: since inception, FDGRX has outperformed the Vanguard 500 Index fund in risk-adjusted return as well as raw routine, but not by very much.

Source

Image

Notice that FDGRX participated more in the bubble-and-burst of the dot-bomb era, with a maximum drawdown of -68.40%. While the S&P 500 fund was cut down to half its previous value, FDGRX was cut down to less than a third of its previous value.

The standard deviation, one measure of volatility, was 20.07%, compared to 14.83% for the S&P 500 fund.

As a result, the Sharpe ratio for FDGRX has been 0.54, compared to 0.51 for the S&P 500 fund.

Most (though not all) of FDGRX's outperformance was simply reward for taking additional risk.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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