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Fidelity's FSMEX, medical tech. fund, CLOSED

edited April 2019 in Fund Discussions
FSMEX is a health care fund, but travels the technology/medical devices path.

I don't know how fresh is this close, but I don't recall seeing any notice a few weeks ago while looking at things within Fidelity. Anyway, from recall in 2018; I do believe the size of this fund moved from about $4.6 billion to almost $7 billion now, in less than 1 years time.

I'll get back here with a handy-dandy chart of this fund and related. The charting is not being cooperative right now.



  • edited April 2019
    Ok, not trying to play tricks with time, the following applies with this chart:
    2015 and some of 2016 were quite sideways for much of the health sector. I chose this time frame (to date) to help show when these sectors started to move apart. If one goes back to 2011 or so, FSPHX and PRHSX have strong long term performance, but this has obviously changed, yes?
    The chart is set with FSMEX, FSPHX, PRHSX active funds with FSMEX being the only tech. medical device centered health fund. Two others are etf's; being IHI and XHE.
    There may be some form of index that is med. tech. only. I have not searched.
    Lastly, with all of the new positioning in DC-land about reworking health care cost, who knows what will arrive. But, currently; large exposure to health care providers such as Humana, United Health Care + others in this area; and insurance are feeling some pain right now. This has and will affect health funds with these holdings. FSHCX is one such fund and I expect its performance to get some more whacks.

    3 health active funds, 2 etfs

    ADD: since Fidelity first introduced their select/sector funds in the early 80's, I don't recall a close. They have shuffled some names to better fit a sector and have merged a few. If they have closed some before, they were not something with which we were involved at the time.

    @msf You're familiar too, with Fidelity functions. I've not had any message, nor discover any announcements regarding the closing of FSMEX.

    Anyway, for your knowledge.
    Take care,
  • I have a memory, dim, of FSPTX being closed on occasions in the 1980s, maybe the 1990s, when my father was urging it on me (I resisted, for some reason)
  • Last Friday at 9pm i got an email from FIDO telling my FSMEX is closed effective IMMEDIATELY!

    I contacted FIDO and they had no answer as to why there was NO NOTICE given, other than they did not want a rush of $$$$'s into the fund.

    I do not recall FIDO doing something so rash before.
  • edited April 2019
    Hi @mcmarasco
    Thank you for this info.
    No notification here; and there remains no news publication for the fund close.
    Of all places, I found a small blip (this morning) indicating the fund is closed within the composition fab for this fund. Other than the red print info at the top of the page, I find no other locations within any Fidelity news page or related about this close.
    Link below for the fund composition page. Scroll down and you will find a "fund history" along the right side of the page, showing a March 30 close. This is a Saturday date, so I will presume the last money allowed may have been the business day of March 29.
    This close also does not affect our future monies in this area; but I am disappointed with their methods for this close.

    Fund page
  • Disappointing I'm sure but understandable. This fund has been a solid option in the health category and that has a lot to do with not only equity selection but AUM prudence. It's exactly what I would look for in a specialized category fund. I've never understood the benefit(s) to existing shareholders of pre-announcing the imminent closing of a fund.

    Just to be clear I had been toying with flipping my position in PRHSX for FSMEX or a least a portion thereof. Guess I'll have to wait.
  • Hi @Mark
    I don't know whether you viewed the chart I posted a few threads back; but the IHI (I-shares etf) has a very close return % over most time frames compared to FSMEX. The expense ratio is almost half of FSMEX. Recalling you may have a Fido brokerage acct., this etf is readily available for purchase.
    Not that everyone is beating a path to purchase in this area; but one may consider that those now blocked from FSMEX may travel to the IBI etf; or perhaps a similar XHE.
    There may be other health related funds that currently tilt to a larger % of med. tech/devices positions, of which I am not aware.
    I still consider this area to be a money maker going forward.
    Comments/thoughts by one and all to this sector are appreciated.
    Take care,
  • Hi @catch22
    Thanks for the info on IHI. I'll check it out.
    And yes, all my toys are at Fidelity except for those that aren't.
  • Ive held IHI for 3 years,and have not been sorry I chose it over FSMEX, returns exceed ytd, 1, 3, 5 and 10 year over Fidelity's fund, which I did look at when choosing, but since I have FSPHX, same manager as FSMEX, chose IHI.
  • Assuming that current share holders can still add to their position I think FIDO may have done the right thing for current shareholders. IF there is great demand fora fund announcing a close in 30 days or so makes more money flow in and the fund that much harder to manage.
  • edited April 2019
    @jerry et al I don't disagree about a time frame chosen by Fidelity. They know better than any of us about the internals.
    A couple of notes for the curious.
    FSMEX and fund assets for the past few years.
    2016 remained mostly around for the year for each month. I suspect, although did not check; this flatness to be the same for 2015, as that year was pretty much sideways for health funds in general.
    ---2016, avg. monthly assets =$2 billion
    ---2017, Aug. = $4 billion
    ---2018, Oct. = $6.3 billion
    ---2019, Mar./early April = $7 billion

    Not a fair and fully just comparison, but FSPHX (broad-based health), which has been in place since 1981 and is very well known and respected, currently has $7.2 billion of managed assets.

    Lastly, we did a test trade and for those having a position in FSMEX, all is well for purchase at this time. I suspect the same holds true for as long as access is allowed where this fund exists within 401k's, 403's, etc. Obviously, a lot of money may still flow to this fund.

    ADD: Fidelity closed the FDGRX fund to new money in 2006. However, notice was provided as to a time frame. I don't recall exactly, but suggest the cut off was within a 3 month period. But, the fund remains open to adding money from existing fund holders, including where available in 401k/403b type retirement accounts.

    Good evening,

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