Before investing, consider the funds investment objectives, risks, charges and expenses. Please visit www.fidelity.com or advisor.fidelity.com for a prospectus or if available, a summary prospectus, containing this information.
Past performance is no guarantee of future results.
Filtering for lower fees and/or higher AUM does not guarantee outperformance for any individual selected fund, nor does it imply that other individual funds not selected may not outperform.
Active and passively managed funds are subject to fees and expenses that do not apply to indexes. Indexes are unmanaged. It is not possible to invest directly in an index.
Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments. Investments in smaller companies may involve greater risks than those in larger, more well-known companies.
1. General methodology:
Fund selection: Our main analysis focused on all U.S. large-cap, foreign large-cap ("international large-cap"), and U.S. small-cap equity mutual funds tracked by Morningstar between Jan. 1, 1992, and Dec. 31, 2015, including all blend, value, and growth funds within each category and including actively managed and passive index funds. We included funds that did not exist for the entire period (closed or merged funds), to reduce survivorship bias. We eliminated funds identified as passive that were labeled as "enhanced index," and eliminated funds with tracking error greater than 1% (which are unlikely to be actual passive index strategies despite their identification in the database). For international large-cap funds, we eliminated funds benchmarked to a price index, for greater comparability. See below for benchmark indexes included and definitions. Our analysis began with the entire set of funds with available data from Morningstar at any point over the full period: 2,013 actively managed mutual funds, and 115 passive index mutual funds. We selected the oldest share class for each fund as representative; where more than one share class was the oldest available, we chose the class labeled as "retail." For U.S. large-cap equity, average fund counts for each subset of selected funds are as follows: Unfiltered (full set of funds available): active 831, passive 50. Fee filter only: active 220, passive 13. Size filter only: active 79, passive 5. Both filters applied: active 46, passive 3. Total fund counts for international large-cap equity funds: active 432, passive 29; average fund counts for performance calculation: active 218, passive 11. Total fund counts for U.S. small-cap equity funds: active 704, passive 43; average fund counts for performance calculation: active 295, passive 18.
Averaging excess returns: We used Morningstar data on returns from Jan. 1, 1992, through Dec. 31, 2015. We calculated each fund's excess returns on a one-year rolling basis, relative to each fund’s primary prospectus benchmark and net of reported expense ratio, for each month. We used an equal-weighted average to calculate overall industry one-year returns for each month. (We chose equal weighting for the averages in order to represent the average performance of the range of individual funds available to investors, rather than asset weighting, which may introduce bias into an analysis.) For filtered subsets of funds, average excess returns ascribed were the one-year forward rolling returns, calculated monthly. All filtered subsets were rebalanced monthly. If a fund closed or was merged during a one-year rolling period, its returns were recorded for the months that it was in existence, and the weighting of the remaining funds in the subset was increased proportionally for the remainder of the year.
Filters: We used Morningstar data on fund expense ratios to represent fees. The fee filter is rebalanced monthly; over the full period, the average cutoff for lowest quartile of fees was 79 bps for active, 11 bps for passive. The resources filter is rebalanced monthly. The size filter used a different methodology for active and passive in order to generate comparable selectivity; for passive funds, using the same filter as for active funds produced an average annual excess return of –36 basis points for the filtered subset in the initial research (using data from Jan. 1, 1992, through Dec. 31, 2014, for the previously published study), while using a filter that selected for the top 10% of passive index funds by AUM (approximating the selectivity of the top five fund family filter for actively managed funds) produced a better average annual excess return of –16 basis points. For a more detailed description of this methodology, see Fidelity Leadership Series article "U.S. Large-Cap Equity: Can Simple Filters Help Investors Find Better-Performing Actively Managed Funds?" (May 2015).
Indexes: Funds in the study included active and passive funds tracked by Morningstar and benchmarked to the following indexes: U.S. large-cap equity (all in USD): Russell 1000; Russell 1000 Growth; Russell 1000 Value; Russell 3000; Russell 3000 Growth; Russell 3000 Value; S&P 500. Foreign (international) large-cap equity (all in USD): MSCI ACWI Ex USA; MSCI ACWI Ex USA Growth; MSCI ACWI Ex USA Value; MSCI EAFE; MSCI EAFE Growth; MSCI EAFE Value; MSCI World Ex USA; MSCI World Ex USA Growth; MSCI World Ex USA Value. U.S. small-cap equity (all in USD): Russell 2000; Russell 2000 Growth; Russell 2000 Value; S&P SmallCap 600.
2. Impact of 21 basis points: To illustrate the potential impact of 21 basis points, we assumed two hypothetical portfolios, one earning 18 basis points of annual excess return, one earning –4 basis points (assuming returns are net of fees), both in relation to a hypothetical benchmark earning 7% constant annual returns. Returns were credited annually at the end of each year, and investor contributions of $5,000 were added at the beginning of each year. Taxes were not considered. After 40 years, the outperforming portfolio account balance would be $1,120,752, while the underperforming portfolio account balance would be $1,056,704, for a difference of $64,048. This example is for illustrative purposes only; it does not represent actual or future performance of any investment, nor is it likely to be duplicated by any specific investment.
3. After making an adjustment for overlapping data, the statistical significance of this outperformance was evaluated in a two-tailed test, and resulted in a t-statistic of 4.43. A two-tailed test is a method for computing the statistical significance of a parameter inferred from a data set, in terms of a test statistic. In this case, the test statistic of 4.43 indicates a 99% likelihood that the results are significant and not random.
Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate, so investors my have a gain or loss when shares are sold. Current performance may be higher or lower than what is quoted, and investors should visit Fidelity.com/performance
for most recent month-end performance.
|Average Annualized Returns as of 12/31/2015
||Manager Start Date
|S&P 500 Index
|Fidelity Focused Stock
|Fidelity Leveraged Company Stock
|Fidelity New Millennium Fund
|NASDAQ Composite Index
|Russell 3000 Growth Index
|Fidelity Growth Company
|Russell 1000 Growth Index
|Fidelity Blue Chip Growth
|Russell 2000 Index
|Fidelity Low-Priced Stock
|Fidelity Small Cap Discovery
|MSCI EAFE (Net MA)
|Fidelity Diversified International
|Fidelity International Discovery
|MSCI EAFE Growth (Net MA)
|Fidelity International Growth
|MSCI AC World ex US (Net MA)
|Fidelity International Capital Appreciation
|MSCI EAFE Small Cap (Net MA)
|Fidelity International Small Cap Opportunities
|MSCI World (Net MA)
*Life of Fund when inception is less than 10‐years.
Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. Life of fund figures are reported as of the commencement date to the period indicated.
Expense Ratio is the total annual fund operating expense ratio from the fund's most recent prospectus.
Stock values fluctuate in response to the activities of individual companies, and general market and economic conditions. Investments in foreign securities involve greater risk than U.S. investments. You may have a gain or loss when you sell your shares. The value of the fund's domestic and foreign investments will vary from day to day in response to many factors, such as adverse issuer, political, regulatory, market, or economic developments. The securities of smaller, less well‐known companies can be more volatile than those of larger companies. Growth stocks can perform differently from the market as a whole and other types of stocks and can be more volatile than other types of stocks. Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time.
Indexes are unmanaged. It is not possible to invest directly in an index.
The S&P 500 Index is a market capitalization‐weighted index of 500 widely held U.S. stocks and includes reinvestment of dividends. The Russell 3000 Growth Index is an index of growth‐oriented stocks of U.S. domiciled companies that are included in the Russell 3000 Index. The Russell 1000®
Growth Index is index of growth‐oriented stocks of the largest U.S. domiciled companies that are included in the Russell 1000 Index. The Russell 2000®
Index is an unmanaged market capitalization‐weighted index of 2,000 small company stocks of U.S. domiciled companies. The MSCI EAFE (Net MA) Index is an index of large and mid cap representation of Developed Markets countries, excluding the US and Canada, net of MA tax. The MSCI EAFE Growth (Net MA) Index is an index designed to measure the performance of growth securities within developed equity markets, excluding the U.S. & Canada, net of MA tax. The MSCI AC World Ex‐US (Net MA) Index is a non‐U.S. stock market index composed of a sample of companies representative of the market structure of 49 countries and includes reinvestment of all dividends, net of MA tax. The MSCI EAFE (Net MA) Index is an index designed to represent smaller capitalization companies in developed markets outside the United States and Canada. The NASDAQ Composite®
Index measures all Nasdaq®
domestic and international based common type stocks listed on The Nasdaq Stock Market®
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