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Sieve Practical Example

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In this post, I’ll walk through a typical use case of a fund sieve.

Investors Question: “I have a Fidelity retirement account. Where do I start?”

For this really simple example, we’re going to load all the funds in the Fidelity family. Then remove all funds that are not in the Giant family. Then we’ll remove all funds that have a front end load.

 

  1. First, sign in to FT Cloud, open the spreadsheet tab (labeled “FT Cloud”), and click the “Load Family button in the upper right.FT Cloud Sieve
  2. Next, we’re going to load the Fidelity family (Funds>>Company>>All>>Manage Large Number of Funds >> Fidelity)FT Cloud Sieve
  3. This next step is the important part. The Fidelity family has 913 funds. We want to pare this down to a more manageable, actually invest-able list. To start, we’re going to press the “and” button with the “FundSize-Giant” selected. This will keep only the Fidelity funds that overlap with the Giant funds family (ie… remove all tiny funds, super specific funds, etc).FT Cloud Sieve
  4. Next, we’ll whittle a little more and remove all funds in the “Loads-Front” family by pressing the “Remove-” button with “Loads-Front” selected.
  5. Press the load button in the lower right to load the final 197 funds.

So, to summarize. We used the sieve to remove a variety of “unwanted” funds. We started with the 913 Fidelity family, then we worked our way down to the 197 funds that make the most sense for the fund scan/sieve.

 

 

Why Do Dividends Adjustments Matter?

FastTrack has been the premier provider of quality dividend adjusted ETF, fund, and stock data for many years. Serious investors know why dividends are critical. But, here’s a quick crash course in a few charts.

The 10 year chart below demonstrates the difference between dividend adjusted return vs non dividend adjusted return for VUSTX (Vanguard INV:Long-Term US Treasury).

This fund is one of the top five US funds in total assets (thus very popular and not picked to exaggerate the example)

vustx Div Comparison

The blue line represents VUSTX with no dividend adjustment and the gold line represents VUSTX with dividend adjustments. The blue line shows a return of 23.98%, when in reality the fund
returned 130.74%. That’s a whopping 106.76% difference in return!

Without accurate dividends, it is impossible to build the long-term, low volatility, low trading strategies that FastTrack is known for.

Another example is FMAGX (Fidelity Magellan), a very famous aggressive equity fund, since 9/1/1988 (the first date in the FastTrack database).

FMAGX div comparison

Again, we can see that dividends are essential to analyzing mutual funds accurately. Over the 23 year period, FMAGX appears to have posted a 38.45% gain without dividends, while accounting for dividends shows an accurate 550.92% gain over the period. Any analysis that does not account for distributions is not portraying the funds real total return. Dividend adjustment is essential for long term analysis.

In summary, FastTrack realizes the importance dividends make when assessing true total return
in investing strategies and in developing long-term trading systems. For the past 25 years the company’s mission has been to provide prompt, accurate, and comprehensive dividend adjustments. Getting an accurate view of a fund’s performance is essential to fund and ETF analysis.