No one does options exclusively. You and I both have other investments, e.g. stocks, ETFs, mutual funds.
Regarding the latter, we set out to do something we thought would be very, very
simple: verify the 6.64% annual return for FWWFX
in the current (January, 2015) Fidelity shareholders update, just received in
the mail.
The impetus?
The numbers in my personal spreadsheet didn’t add up, so I
thought I’d “dig a little deeper.” To
put it mildly, I was surprised that Fidelity customer assistance couldn’t do it
either.
Here are the numbers:
TICKER
|
FWWFX
|
Close 10/31/2013
|
25.41
|
Close 10/31/2014
|
24.93
|
|
|
Dividends
|
0.087
|
Capital
gaine
|
1.979
|
|
2.066
|
|
|
Total
return
|
26.996
|
%age
return, i.e. 2014 close + dist/2013 close, or (24.93+2.066)/25.41
|
6.242%
|
|
|
Reported
return in Fidelity lit.
|
6.640%
|
|
|
Discrepancy
|
-0.40%
|
Obviously, there was something wrong in my math, and surely
Fidelity could easily straighten me out, and “reconcile” the account.
Turns out not. I was
gobsmacked. While we are sorting this
out, (and the possibility exists that I am still just “missing something” that
I should be able to spot but can’t -- post the error if you see it, ok?) here is the full transcript of our “talk”:
==================================================
System: Thank you for contacting Fidelity Investments. All
interactions are subject to recordkeeping and monitoring. Chat representatives
of Fidelity Brokerage Services LLC, Member NYSE, SIPC are unable to accept any
trading requests to buy, sell or exchange securities, nor do they provide
legal, tax or investment advice.
ME: Initial Question/Comment: Question: reading your current
shareholder update. For FWWFX, stating a gain of 6.64% from Oct 31 2103 to same date 2014. I
reviewed, got decline in those dates from 25.41 to 24.93. Loss of 1.9% or so.
Please advise.
System: FIDELITY REPRESENTATIVE has joined this session!
System: Connected Your Reference Number
for this chat is 5750466.
FIDELITY REPRESENTATIVE: Hello, thank you for contacting us,
John. How are you today?
ME: Good, thanks.
FIDELITY REPRESENTATIVE: I'm glad to hear you're well. I've
not reviewed that fund, but are your calculations taking into account capital
gains distributions and dividends paid out during that time?
ME: Prices taken straight off yahoo. Are distributions
:"separate"?
ME: I guess they might be.
ME: How much were dist. in that period, then, we'll re do
the math.
FIDELITY REPRESENTATIVE: Yes. The historical prices reported
do not include any distributions, which are subtracted from the value of the
fund upon distribution, so it's possible that the value of the fund may be
lower while still technically calculated with a gain.
FIDELITY REPRESENTATIVE: You can review the distribution
history here:
https://fundresearch.fidelity.com/mutual-funds/fees-and-prices/315910505?type=o-NavBar
FIDELITY REPRESENTATIVE: The performance figures reported on
Fidelity.com account for all distributions in addition to market movement
during the periods listed.
ME: OK
ME: I now get 6.2%
ME: Still off by .44%. Can you resolve?
ME: I added 24.93 + .087+ 1.979 to get 26.996
ME: Div by 24.93 Oct
31 2014 price
FIDELITY REPRESENTATIVE: I'm afraid I cannot. I'm not an
analyst and I'm not familiar with the exactly calculations are figured. It's
possible that the fund's expenses are being figured as well.
ME: k tx
FIDELITY REPRESENTATIVE: I can assure you that the data
presented on Fidelity.com is provided by properly licensed analysts and is
correct.
ME: Can you have someone email me the manner in which the
6.64% FWWFX return was calc, e.g. an analyst?
FIDELITY REPRESENTATIVE: Our analysts are not able to
communicate directly with clients.
ME: A shareholder should be able to see how the return was
calculated.
ME: You are asking me to take this on faith.
ME: We are .44% off.
ME: No one there can tell me?
ME: How you figured the return on one of your major funds?
FIDELITY REPRESENTATIVE: You are welcome to review the
fund's prospectus online if you like.
ME: I have your report in my hand.
FIDELITY REPRESENTATIVE: The figures presented on
Fidelity.com are regularly reviewed and re-calculated with new data and are
correct.
ME: Lots of words, not much clear explanation on the return.
ME: If they are correct, should be easy to verify.
ME: You have heard the phrase, "trust, but
verify?"
ME: Can I talk to a super?
FIDELITY REPRESENTATIVE: Certainly. Just a moment.
System: NAME WITHHELD
has joined this session!
System: FIDELITY
REPRESENTATIVE has left this session!
ME: Hi: Seeking explanation of FWWFX return ---- price, div
and cap gains on how FIDELITY figured 6.64% return FWWFX. Price Oct 31 2013 was 25.41, Oct 31 2014 was 24.93, plus div .087
plus cap gain 1.979 gives me 6.2% , not 6.64% as published. Put me straight....
FIDELITY SUPERVISOR: Hello, my is (withheld) and I am a
supervisor in the Electronic Response department. Would you mind if I take a
moment to review your chat so far?
ME: No problem, take your time...
FIDELITY SUPERVISOR: Thank you for your patience. I am happy
to help to the best of my ability. We do not have all of the details of everything
that is factored into that calculation, but I can see if I am able to duplicate
that figure.
FIDELITY SUPERVISOR: Give me a few minutes to run through
the historical data for FWWFX.
ME: thanks
ME: Appreciated
ME: brb in 5 min ok?
ME: Don't hang up on me ok?
FIDELITY SUPERVISOR: That's fine. I will post my findings
and wait until you return.
ME: Thank you, brb.
ME: Back.
FIDELITY SUPERVISOR: I am still reviewing the performance
figures. It may be just a few minutes longer.
ME: Take your time, I appreciate your assistance.
ME: Would like to get this right.
ME: Prob. I am just missing something.
FIDELITY SUPERVISOR: I have been running a few different
figures to try to replicate that return %. I was looking at the change between 10/31/13 and 10/31/14 and also 11/1/13 to 10/31/14.
The numbers are close, but I am not able to get that exact number.
FIDELITY SUPERVISOR: The report mentions that those figures
are based on the fiscal year ending on 10/14/14,
but it never mentions the specific dates that are used in the calculation.
ME: In your booklet, it says "periods ended Oct 31, 2014. I don't see Oct. 14
ME: In your booklet, it says "periods ended Oct 31, 2014." I don't see Oct.
14
FIDELITY SUPERVISOR: I'm sorry, that was a typo.
FIDELITY SUPERVISOR: I meant to write 10/31/14.
ME: No problem.
FIDELITY SUPERVISOR: I am assuming this would be 11/1/13 through 10/31/14, but that part is not made clear in the
Investor's report. Going on that assumption, I took the difference between the
prices on those dates, which would be -$0.46, and factored in the total
distributions for the year ($2.066), to get a total difference of $1.606.
ME: OK. Did you figure a return? Or should I?
ME: We are getting the same dist., i.e. 2.066.
ME: Are we agree that we go from Oct 31 to Oct 31, 2013, to 2014/
FIDELITY SUPERVISOR: Based on the basic calculation for
return, we should just divide $1.606 by the starting price, $25.39 on 11/1/13, which gives us 6.325%.
ME: Are we agree that we go from Oct 31 to Oct 31, 2013, to 2014?
ME: OK, at 6.325% still falls short of the reported 6.64%,
it would appear.
FIDELITY SUPERVISOR: I would imagine it would be 11/1/13 to 10/31/14. I did also run the numbers from 10/31/13 to 10/31/14 and did not find a match with the
6.64%.
FIDELITY SUPERVISOR: My conclusion is that there is some
other factor that is slightly altering the figure, and that is likely just a
difference in the pricing dates that were used for the fiscal year.
FIDELITY SUPERVISOR: I apologize that I am unable to provide
more information. Our analysts do not provide us with anything outside of the
same documents that are presented to our clients.
ME: So, for a "civilian" like myself, there is no
relatively easy way to verify Fidelity returns?
FIDELITY SUPERVISOR: Unfortunately we do not have any
further access to all of the variables that were used in the calculation. The
numbers go through a long process of cross-checking by different internal
groups for accuracy.
ME: And no one at Fidelity who can provide same?
FIDELITY SUPERVISOR: There are individuals in the fund
management group who have access to all of the details, but they have not made
them publicly available and the group is not accessible to front line
representatives.
ME: Thanks for trying, I do appreciate the effort, but must
admit I am somewhat disappointed and disconcerted that such a seemingly simple
thing as "fact checking" is not able to be done here.
ME: Bye.
FIDELITY SUPERVISOR: I am sorry I wasn't able to provide you
with the solution you were looking for. I will submit feedback to our Fund
Management group to suggest adding specific dates for the fiscal year
calculations.
FIDELITY SUPERVISOR: Please let us know if you need any
assistance in the future. Have a good rest of the day.
ME: Yes, if I may say, I think there are many pages of fine
print in the shareholder update, but perhaps, from my vantage, ask mgt. to add
a simple, short explanation, plain to see, on how the annual return was
calculated.
FIDELITY SUPERVISOR: That is a great suggestion. I will add
that to the feedback that I am entering now.
ME: e.g. X + Y + Z DIVIDED BY A = RETURN. Just real simple.
ME: Then footnote as necessary until the cows come home.
ME: There is presently no easy, online way to verify your
returns.
ME: Have a nice week.
FIDELITY SUPERVISOR: Thank you. You too!
System: NAME WITHHELD has left this session!
System: The session has ended!
