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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?


To: Dennis who wrote (1253)11/24/1998 5:37:00 PM
From: Carolyn S.  Respond to of 4916
 
"OK, BUT if the manager is buying and selling all the time wouldn't this cause wild fluctuations in price??"

When a fund sells a stock, it does not come out of the price of the fund. The fund still has those $$$ but as cash. And when a fund buys stocks it does not add to the price of the fund. Those fund dollars just become stock instead of cash.

The NAV of a fund is (in simple terms):

(the value of the stock + the cash they have) / number of fund shares

Carolyn S.