(PUB) Morningstar FundInvestor

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Fidelity Four-in-One Index Finds Its Way In Changes to the 500 | Russel Kinnel

Brian Rogers Stepping Down in 2015 Just as we were going to press with FundInvestor , we got some big news from Baltimore. Brian Rogers will step down from managing T. Rowe Price Equity Income PRFDX in October 2015 , the 30 th anniversary of the fund’s launch. John Linehan, who ran T. Rowe Price Value TRVLX for a few years, will take over for Rogers. Linehan produced returns of 8 . 4% versus 7 . 1% for the Russell 1000 Value in his stint from 2003 to 2009 . Since then, he has comanaged a separate account, Large-Cap Value Equity, along with Rogers and Mark Finn. Rogers plans to remain as chairman and chief investment officer of the firm after he steps down from the fund. It’s been an illustrious career for Rogers, who has produced excellent returns with modest risks. He’s also been a key contributor to the firm’s growth over the years. At T. Rowe Price Equity Income, Rogers produced returns of 11 . 3% annualized versus 10 . 9% for the S & P 500 since the fund’s start date through March 31 , 2014 . The fund’s 15 -year downside capture ratio of 81 . 8 shows that the fund has also had less risk over the years. The 81 . 8 means the fund typically lost 81 . 8% as much as the S & P in downturns.

We are adding Fidelity Four-in-One Index FFNOX and dropping Caldwell & Orkin Market Opportu- nity COAGX . If you like two-in-one shampoos, you’ll love Fidelity Four-in-One Index. The fund combines an S & P 500 Index fund, an extended-market index fund, a U.S. bond-market index fund, and a foreign- stock index fund. About half of the portfolio goes into Fidelity Spartan 500 Index FUSEX , while a fourth goes to Fidelity Spartan International Index FSIIX , 15% goes to Fidelity Spartan U.S. Bond Index FBIDX , and 12% goes to Fidelity Spartan Extended Market Index FSEMX . We rate the fund Silver because it delivers exposure to a wide swath of the market for just 0 . 22% in fees. That’s an all-in number that includes the fees of the underlying mutual funds. That’s tough to beat for a low $ 2 , 500 minimum investment. The biggest sacrifice you make in selecting this fund is that you can’t adjust the allocations among those four funds yourself. On the other hand, there aren’t many comparable funds at a low minimum investment. Fidelity Four-in-One Index makes a nice starter fund, as it covers so much and charges so little. Vanguard’s Target Retirement and LifeStrategy funds are also worth a look for similar reasons.

What is Morningstar FundInvestor 500 ? The Morningstar FundInvestor 500 features the industry’s best and most notable funds. Use the list to get new in- vestment ideas and track the funds you already own. FundInvestor subscribers have access to one-page monthly reports on all 500 funds on mfi.morningstar.com. Just type in the name or ticker of the fund in the search box.

The long transition period should make for a smooth hand-off. We’ll provide updates as we learn more. œ

Summary of Changes

Add

Drop

Fidelity Four-in-One Index

Caldwell & Orkin Market Opp

Category Change

To

From

See the facing page for more.

Fidelity Low-Priced Stock

Mid-Cap Value Mid-Cap Blend

Pax World Balanced Individual

Mod Alloc

Agg Alloc

Caldwell & Orkin Market Opportunity Goes Out We’re dropping coverage of this fund because of its small asset base and poor performance. We no longer rate it, but when we last did, we gave it a Neutral.

AMG Managers Skyline Spec Eqts

Small Blend Small Value

PIMCO All Asset

Tactical

World Alloc

Appleseed

World Alloc

Mid-Cap Value