Detailed Performance of Asset Classes - Fidelity Funds

The illustrations below show how each asset class within the strategy performed. Recall that the strategy picks funds in three asset classes - U.S, sector, international, and bond classes. The same fund selection rules are used for selecting funds in each class. Given that these rules (same rules, parameter values, etc.) work across all three asset classes, we have added confidence that these results are not just due to chance.

First, a quick look at the U.S. sector asset class, and how well the strategy performed across these funds.

Fidelity U.S. Sector Fund Strategy Performance

Figure 1. Strategy Performance with the Fidelity U.S. Sector Funds

The following table provides key statistics for this asset class. Note that CAGR came in at 23.0%, while the asset class average came in at 12.8%. The volatility of the strategy was higher than the asset class as a whole (not surprising since we hold only 4 funds in this class), but draw-down ( MDD) was actually a bit better.

Table 1. Fidelity U.S. Sector Fund Performance Summary

The next table gives a year-by-year performance summary for the strategy, the asset class, and the S&P 500. Observe that the strategy beats the performance of the general asset class in most years. The great news here is that performance as compared to the asset class is very good. However, it's also worth noting that the strategy should not be expected to out-perform the asset class every single year.

Table 2. Fidelity U.S. Sector Fund Performance - Yearly Returns

Fidelity International Fund Strategy Performance

The following illustration shows the performance of the international funds in our hypothetical back-test starting on 01/03/1995, We again see that the strategy generally performs better than it's asset class (Fidelity international funds), which is exactly what we're seeking.

Figure 2. Strategy Performance with the Fidelity International Funds

Table 3. Fidelity International Fund Performance Summary

Table 4. Fidelity International Fund Performance - Yearly Returns

Fidelity Bond Fund Strategy Performance

The following illustration shows the performance of the bond funds in our hypothetical back-test starting on 01/03/1995, It's interesting to see that the bond strategy has essentially matched the performance of the S&P 500 over this time frame, but has experienced much less volatility. For an investor starting off in 2000, bond funds did much better than equities. Of course at the time, making this call was not nearly as easy!

Figure 3. Strategy Performance with the Fidelity Bond Funds

Table 5. Fidelity Bond Fund Performance Summary

Table 6. Fidelity Bond Fund Performance - Yearly Returns