Vanguard Select Energy VGENX
Fidelity Select-Energy Services FSESX
Fidelity Select-Energy FSENX
Fund 1-yr 3-yr 5-yr 10-yr Assets 5yr Cost
VGENX 34 18.2 17.3 15.0 $769.8MM $ 29
FSESX 49 28.3 21.4 11.2 $568.0MM $131
FSENX 32.4 17.3 13.4 11.3 $198.9 $129
Vanguard Specialized Portfolios:
Energy Portfolio invests in about 80 stocks of companies engaged in
the production, transmission, or marketing of energy, or in research
or experimentation in the energy sector.
Fidelity Select-Energy Services
Invests mainly in equity securities of companies in the energy service
field, including those that provide services and equipment to the
conventional areas of oil, gas, electricity, and coal, and newer
sources of energy such as nuclear, geothermal, oil shale, and solar power.
Fidelity Select-Energy:
Invests mainly in equity securities of companies in the energy field,
including the conventional areas of oil, gas, electricity, and coal,
and newer sources of energy such as nuclear, geothermal, oil shale,
and solar power.
Overall the FSESX fund appears to yield the best results for the 1, 3
and 5 year periods but the VGENX had the best returns for the 10 year
period. My rational is this - assume that one held each of the funds
for a 5 year period we would see the following gains (assuming $10k
invested in each):
VGENX 10000 + (10000*5*.173) - (10*29) = $18360
FSESX 10000 + (10000*5*.214) - (10*131) = $19390
FSENX 10000 + (10000*5*.134) - (10*129) = $15410
One can see that the difference between the VGENX and FSESX (after
charges) is only $1000; my long term goal is to maximize overall
profits but minimize my losses during hard times (as we have seen in
the past). In fact, if FSESX had a gain of only 19.34% the profit
earned by FSESX and VGENX would by identical.
Now let us assume that we have a down turn in the energy/energy
services sector the fees will quickly erode your profits (lets assume
each had a 7% gain for the same period):
VGENX 10000 + (10000*5*.07) - (10*29) = $13210
FSESX 10000 + (10000*5*.07) - (10*131) = $12190
FSENX 10000 + (10000*5*.07) - (10*129) = $12210
FSESX would have to achieve a 9.0% gain to yield the same returns as
VGENX; sure if the market continues to excel as it did during 1996,
FSESX would be the BEST choice without a doubt - but what about during
the bad times that seem to come every 5-7 years in the energy
business?
In short, I do not want to be penalized during bad years and with the
fee structure Fidelity has installed I would be 'zapped' twice during
an off year.
Just my 2 cents worth..... |
