Mutual Fund News – October 2009

In my All Star Fund Trader publication, I focus on ETFs and tradable mutual funds.  Tradable mutual funds are typical those from fund families that have no restrictions on trading frequency, namely Direxion, ProFunds, and Rydex.

I also have a long history of using Fidelity funds, especially their Select sector and industry funds.  These funds were originally targeted at active traders and even had hourly pricing.  In recent years Fidelity has taken many steps to deter short-term trading in their entire fund family.  Since many of my subscribers are still fans of Fidelity funds, I continue to track them too.  Here then is a compilation of the latest news from these fund families:

Direxion Funds

As of the close on September 30, 2009, all Direxion leveraged mutual funds changed their objective from daily to monthly tracking.  Leverage was also reduced from 2.5x to 2x for many of the funds.  Additional information on monthly leveraged mutual funds can be found on the Direxion website and in our previously published article.  Information on the Direxion Alternative Strategy funds can be found in our April Direxion Funds update.

Fidelity Funds

Fidelity Select Paper and Forest Products (former ticker = FSPFX) and Fidelity Networking and Infrastructure (former ticker = FNINX) stopped trading on June 19, 2009.  The Fidelity website no longer contains any information on either fund.  Both funds were closed to new accounts back in March.

As of August 31, 2009, Fidelity Small Cap Retirement Fund (FSCRX) was renamed Fidelity Small Cap Discovery.  The name change will not affect how the portfolio is managed.  The portfolio’s investment strategy and benchmark are not changing. Since inception, Fidelity Small Cap Retirement has been intended exclusively for institutional retirement plans.  The portfolio is being renamed to reflect that the fund will no longer be restricted to retirement accounts.

ProFunds

ProFunds posted an “open letter” on leveraged and inverse funds a while back.  I believe the class action suit against ProShares is without merit.  When visiting in the ProFunds website, one of the headlines definitely caught my eye: ProFunds Names Doberman General Counsel.

Rydex Funds

Effective August 1, 2009, Rydex Commodities Strategy (RYMBX) removed its short-term redemption fee (formerly 1% for shares held less than 30 days).

Rydex|SGI Long/Short Commodities Strategy Fund (RYLFX) began posting a daily NAV on June 25, 2009 although it wasn’t officially announced until two weeks later with the July 6 press release.  According to the overview, the fund seeks to match the daily performance of the JPMorgan Core Commodity-Investable Global Asset Rotator Sigma Long-Short Total Return Index.  The fund has a net expense ratio of 1.83% and a 1% redemption fee on shares held less than 30 days.

Back on May 27, Security Global Investors and Rydex Investments launched a unified brand strategy that “reflects the enhanced value that an integrated Security Global Investors and Rydex Investments bring to the marketplace, including a full range of investment management solutions spanning the asset allocation spectrum.”  As a result, many but not all Rydex funds are now called Rydex|SGI funds.

Information on many changes that Rydex implemented earlier in the year can be found in our April Rydex Funds update.

Disclosure (compliant with FTC 16 CFR Part 255):  I have no positions in any of the companies or ETF sponsors mentioned.  I have never received any income, revenue, or fees from, or on behalf of, any of the companies or ETF sponsors mentioned.