Problem#1: Mutual Fund Exercise -- Small Stocks

Youve learned that small stocks outperform large stocks over the long run.

Theory is nice, but you want to profit from it.

Use Fidelitys Website:

www.fidelity.com

[Use No Transaction fees to make it easier.]

• News and research
• US equity
• Small Blend

Click on See Results.

Click on Net fees to find the fund with the lowest fees.

Its ticker symbol is FSSNX.

Assume that you invested $10,000 on March 31, 2012.

Q5. If you invested $10,000 in this fund, how much would you pay Fidelity annually to manage the account? Show work.

SHOW WORK! NO WORK NO POINTS

Q7. How many funds have similar style? That is, in this universe, how many funds have the style of US Equity Small Blend?

Q8. Is this fund [FSSNX ] active or passive? Why?

Q9. For the 5 years ending March 31, 2022, how many portfolios with this style had higher returns than FSSNX? [Hint: Click on the 5-year column.].

What percent of the portfolios with this style had higher returns than FSSNX?

Q10. Does this indicate that the market for this style [Small Blend] is efficient?

Q11. Why or why not?

Q12. Provide the following information for the fund that had the lowest 5-year return.

Name:

Ticker Symbol:

5-year Return:

Number of holdings:

Q13. Does this portfolio have more risk than the benchmark?

Why or why not?

Q14. What was the average annual return for Large Stocks [FXAIX] for the five years ending March 31, 2022? ___________________

Did Small Stocks [FSSNX] have higher returns than Large Stocks [FXAIX] for the five years ending March 31, 2022? _________________

Q15. What was the average annual return for Large Stocks [FXAIX] for the ten years ending March 31, 2022? ___________________

Did Small Stocks [FSSNX] have higher returns than Large Stocks [FXAIX] for the ten years ending March 31, 2022? _________________