Environmental Name Change

As of July 1, 2010, the Select Environmental Portfolio was renamed the Select Environment & Alternative Energy Portfolio. The investment strategy of the fund changed somewhat, as well:

Before July 1, 2010, the fund’s investment strategy was normally to invest at least 80% of assets in securities of companies principally engaged in the research, development, manufacture, or distribution of products, processes, or services related to waste management, pollution control or reduction, conservation, improving the environment or other environmental concerns.

Effective July 1, 2010, the fund’s investment strategy now is normally to invest at least 80% of assets in securities of companies principally engaged in business activities related to alternative and renewable energy, energy efficiency, pollution control, water infrastructure, waste and recycling technologies, or other environmental support services.

Posted 8/4/10 10:42pm ET in Fidelity Investments | Permalink | Comments (0)

2009 Qualified Dividends

Fidelity shows qualified dividends paid on funds in a taxable account at www.fidelity.com and on 2009 Form 1099-DIV. These dividends are from companies the funds held for the required holding periods to qualify as qualified dividends. In addition to meeting the holding period within the fund, however, you also have to hold your fund shares for the required holding period for your dividends to be qualified. To pass the qualified dividend holding period test, you must hold your fund shares for a period of at least 61 days, which can precede, straddle, or follow the ex-date of the dividend.

Fidelity paid dividends on several funds in Fundranker’s Top Eight Model Portfolio in April and December, 2009. Here is a list of those dividends, ex-dates, days Fundranker held shares in the funds, and whether those days pass the qualified dividends holding test:

Assuming you bought and sold the above funds on Fundranker exchange dates, the bottom line here is that you should claim dividends that Fidelity reports as qualified for Gold, Materials, Pharmaceuticals, and Telecommunications as qualified dividends, but not those that Fidelity reports as qualified for Chemicals, Electronics, or Multimedia.

If you bought and sold the above funds on dates other than Fundranker exchange dates, or if you held, in a taxable account, other Fidelity funds which paid qualified dividends, you’ll need to calculate your own holding periods to determine whether the dividends Fidelity reports as qualified are truly qualified.

Posted 3/03/10 11:20am ET in Fidelity Investments, Fundranker, Tax Tips | Permalink | Comments (0)

FNINX, FSPFX Close Permanently

Fidelity’s Select Networking & Infrastructure and Select Paper & Forest Products closed permanently on June 19, 2009. As of that date, Select Networking & Infrastructure was merged into Select Communications Equipment (FSDCX), while Select Paper & Forest Products was merged into Select Materials (FSDPX), both of which are in the Fundranker’s Top Eight Model Portfolio this month. Shareholders of the two closed funds were issued equivalent shares of Select Communications Equipment and Select Materials.

Select Communications Equipment is doing well so far in June, and it looks like it will remain in the Top Eight Model Portfolio for July. Select Materials has fallen out of the Top Eight Model Portfolio and most likely will be exchanged in July.

We will be updating the Fundranker website soon to reflect this change in Fidelity’s Select Fund offerings.

Posted 6/25/09 10:00am ET in Fidelity Investments, Fundranker | Permalink | Comments (0)

Fidelity Minimum Initial Investments

According to the latest Fidelity Investments Select Funds Prospectus, all of the Select funds require a $2,500 minimum initial investment for traditional and Roth IRA accounts, but they require only a $500 minimum initial investment for SEP-IRA and Keogh accounts. In practice, however, Fidelity’s online trading system allows minimum initial investments of $500 for new positions in Select funds for traditional IRAs and Roth IRA accounts, as well. At the time of this posting, Fidelity’s online trading system does not seem to work correctly for Select Utilities, for which it still requires a minimum initial investment of $2,500 for any IRA or Keogh account, in exception to the prospectus.

If you exchange between $500 and $2,000 into a new position in one of the Select funds online, you’ll receive a warning that your account may be subject to a small balance maintenance fee of $12. According to the Select Fund Prospectus, account fund balances are evaluated in November or December each year, and those with balances less than $2,000 are charged the $12 fee, even those in SEP-IRA and Keogh accounts. Accounts opened after September 30 are not subject to the small balance maintenance fee for that calendar year. Also, if you have at least $25,000 in assets at Fidelity, small balance maintenance fees for your accounts are waived.

In our FAQs about getting started and rebalancing, we discuss minimum amounts you should invest when using the Fundranker system for various types of accounts. Because of how Fidelity’s online trading system treats traditional and Roth IRA accounts in exception to the Select Funds Prospectus, in practice you can lump traditional and Roth IRA accounts in with the minimums we discuss for SEP-IRA and Keogh accounts.

Posted 6/18/09 1:34pm ET in Fidelity Investments, Fundranker | Permalink | Comments (0)

April 17 Dividends

Fidelity Investments paid dividends on April 17, 2009, the ex-dividend date, for three of the funds in Fundranker’s Top Eight Model Portfolio: Select Electronics, Select Pharmaceuticals, and Select Telecommunications. If you hold any of these funds in taxable accounts, here’s the scoop on how to determine whether your shares in these three funds meet the 61-day holding period test for qualified dividends. Of course, if you purchased or exchange any or all of your shares in these three funds on days other than Fundranker exchange dates, you will have to calculate your 61-day holding periods using those dates. See Select Fund Dividends for more information.

Fundranker’s Top Eight Model Portfolio purchased Select Electronics on April 3, so the underlying shares will not meet the 61-day holding period test until June 3, 2009. If Fidelity Investments reports it on your 2009 Form 1099-DIV as a qualified dividend and Fundranker holds it through June 3, you should report it as a qualified dividend on your 2009 Form 1040. If Fundranker exchanges the fund before June 3, you should not report it as a qualified dividend on your 2009 Form 1040.

Fundranker’s Top Eight Model Portfolio purchased Select Pharmaceuticals on October 2, 2008, so the underlying shares already easily meet the 61-day holding period test for qualified dividends. If Fidelity Investments reports Pharmaceutical’s April 17 dividend on your 2009 Form 1099-DIV as a qualified dividend, you should report it as a qualified dividend on your 2009 Form 1040.

Fundranker’s Top Eight Model Portfolio purchased Select Telecommunications on March 4, so the underlying shares will meet the 61-day holding period test for qualified dividends on May 4, Fundranker’s next exchange date. Even if Fundranker exchanges the fund that day, the underlying shares still will meet the 61-day holding period test for qualified dividends. If Fidelity Investments reports Telecommunications’ April 17 dividend as a qualified dividend, you should report it as a qualified dividend on your 2009 Form 1040.

Posted 4/17/09 9:03pm ET in Fidelity Investments, Fundranker, Tax Tips | Permalink | Comments (0)

FNINX, FSPFX Close to New Investors

Two of Fidelity Investments’ Select funds, Networking & Infrastructure (FNINX) and Paper & Forest Products (FSPFX), closed to new investors as of March 19, 2009. This means that current investors in the funds can add to their positions, but you cannot open a new position in either fund. This change caught us unaware at Fidelity Select Fundranker and affected the Fundranker system immediately, as it just so happened that Networking & Infrastructure (FNINX), had it still been open, would have made a dramatic move to number three in the Top Eight Model Portfolio for April. We apologize again for the late reissue of the April issue with a corrected listing of the Top Eight Model Portfolio and corrected exchanges for April 3.

The two funds were closed in March pending shareholder votes to merge Networking & Infrastructure (FNINX) into Communications Equipment (FSDCX) and to merge Paper & Forest Products (FSPFX) into Materials (FSDPX). The dates for the votes have not yet been set, and in the meantime, the funds will remain closed to new investors.

If the funds eventually are merged, Networking & Infrastructure and Paper & Forest Products would close permanently and their assets would be rolled into Communications Equipment and Materials. Shareholders of Communications Equipment or Materials would see no effect from the merger; that is, they would still own the same number of shares at the same NAV. Shareholders of Networking & Infrastructure or Paper & Forest Products, on the other hand, would get replacement shares of Communications Equipment or Materials that are equivalent in value to their original Networking & Infrastructure or Paper & Forest Products shares.

Posted 4/4/09 4:35pm ET in Fidelity Investments | Permalink | Comments (0)