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FYI: Fidelity Low-Priced Stock Fund (FLPSX)
By JLP | September 9, 2006
I was just checking my wife’s 401(k) balance and noticed a HUGE drop in the price of our Fidelity Low-Priced Stock Fund (FLPSX). The Fidelity website showed it down $3.52 today, which is an 8.2% drop. At first it was a little disturbing because it represented a nice chunk of change. Anyway, I did a search and didn’t find any information about the price drop. Finally, I came across some information on the discussion boards at Morningstar. That’s where I found out that both the Fidelity Real Estate Investment Portfolio (FRESX) and the Fidelity Low-Price Stock Fund (FLPSX) declared distributions. Here’s the information from the Fidelity website:
Fidelity Real Estate Investment Portfolio and Fidelity Low-Priced Stock Fund Declare Distributions
What are the details of these distributions?
On Monday, September 11, 2006, both Fidelity Real Estate Investment Portfolio and Fidelity Low-Priced Stock Fund will pay distributions to their shareholders. Fidelity Real Estate Investment Portfolio will pay a distribution of approximately $3.52, while Fidelity Low-Priced Stock Fund will pay a distribution of approximately $3.64. Because distributions are paid out of a fund’s assets, on Friday, September 8, these funds’ ex-dividend date, shareholders of record will notice that the distribution was deducted from these funds’ net asset value (NAV), or share price. Assuming there are no other factors affecting the NAV, the NAV at the close of the market Friday should be substantially lower than the NAV on the preceding day. This is a normal result of a distribution payout.
As of 4:00 pm on September 8, the Fidelity Real Estate Investment Portfolio’s distribution will cause its NAV to drop approximately $3.52 (or 9.6% of the NAV) and Fidelity Low-Priced Stock Fund’s distribution will cause its NAV to drop approximately $3.64 (or 8.5% of the NAV) from each respective fund’s prior day closing NAV. Market activity may also impact each fund’s NAV on the ex-dividend date, so the total change in each fund’s NAV on that day may be more or less than the amount of each distribution.
It’s important to keep in mind, however, that distributions are part of a fund’s total return. Although the NAV of the fund drops when a distribution is declared, shareholders will either have their proceeds reinvested in additional shares of the fund or they will receive the value of the distribution in cash according to standing instructions they have previously communicated to Fidelity.
So, although it may look like your fund has gone down, it really hasn’t. Your account balance should be back to normal on Monday, September 11.
Topics: Investing, Mutual Funds | 3 Comments »
September 9th, 2006 at 10:01 pm
Does this have any negative tax consequences?
September 10th, 2006 at 1:24 pm
Fivecent, since it’s in a 401(k), no.
April 30th, 2008 at 8:50 am
[...] 401k balance and noticed a HUGE drop in the price of our Fidelity Low-Priced Stock Fund FLPSX. …http://allfinancialmatters.com/2006/09/09/fyi-fidelity-low-priced-stock-fund-flpsx/FLPSX: Holdings for FIDELITY LOW-PRICED STOCK FUND – Yahoo! FinanceYahoo! Finance is a leading [...]