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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: Roy F who wrote (12806)	12/22/1998 7:07:00 PM
From: Uncle Frank	Read Replies (3) \| Respond to of 13594

>>My understanding is that an index fund is required to own all the stocks in the index. Not so. The published investment objective of Fidelity Spartan Market Index (fsmkx) is a good example of how these funds are run: The investment objective of Fidelity Market Index Fund is to seek investment results that correspond to the total return of the Standard & Poor's 500, while keeping transaction costs and other expenses low. Under normal conditions, the fund will invest at least 80% of its assets in equity securities of companies which compose the S&P 500. In seeking to duplicate the performance of the S&P 500, the fund's manager will attempt over time to allocate the fund's portfolio among common stocks in approximately the same weightings as the S&P 500, beginning with the heaviest-weighted stocks that make up a larger portion of the Index's value. Over the long term, management seeks a correlation between the performance of the fund and that of the S&P 500 of .98 or better. Imho, being an s&p500 stock will increase the volatility of aol by decreasing the number of shares available for purchase at times of high demand. Frank