| Fidelity
Giants Holdings Mirror Vanguard
By Will McClatchy
August 21, 2000 |
|
Why do Fidelity's biggest funds tend to track the S&P 500
so closely? A closer look at them shows they hold many of the
same stocks in the same amounts.
A remarkable 65%
of Fidelity Magellan (FMAGX) stock holdings are absolutely
identical to the S&P 500, IndexFunds.com's exclusive new study
shows. Similarly, 63%
of Fidelity Growth & Income (FGRIX) stocks and 58%
of Fidelity Blue Chip Growth (FBGRX) stocks are held in exactly
the same amounts as the S&P 500.
This study adds strength to the claim that Fidelity is charging
large fees for stocks that can be obtained at far less cost with
index mutual funds such as the Vanguard S&P 500. The results
are strengthened by high correlations between Fidelity's top funds
and the S&P, which are all among the 20 largest mutual funds
sold in the US.
| Fund |
Size |
Annual Fees |
S&P Holdings |
S&P Correlation |
| Vanguard S&P 500 |
$105B |
0.18% |
99% |
99% |
| Fidelity Magellan |
$104B |
0.75% |
65% |
89% |
| Fidelity Growth and Income |
$42B |
0.68% |
63% |
87% |
| Fidelity Blue Chip Growth |
$30B |
0.71% |
58% |
86% |
Whether investors tend to view past behavior as an indication
of future performance (correlation) or prefer to rely on comparing
physically identical portfolios, there appears to be little justification
for a thoughtful investor to choose any one of these giant Fidelity
funds over an inexpensive S&P fund.
The study was performed using Wiesenberger
data of mutual fund holdings.
