Today I performed an analysis of Large Cap, Mid Cap and Small Cap returns and recognized that Small Caps have been the weakest performer in 2017 both in YTD returns and average monthly returns. This caused me to look closely at the Small Cap funds in my retirement accounts: Fidelity Small Cap Premium (FSSVX) and Fidelity Small Cap Enhanced (FCPEX). As you can see below YTD performance of FCPEX is troubling:
FCPEX has been stuck in neutral in a trading range between $13.50 and $14.20 year to date. FSSVX has produced close to a 4% return while FCPEX has registered a paltry 0.8% return YTD. All while the S&P has provided a 7.7% return and the Nasdaq (via QQQ) has given me a 17.7% YTD return – even with Friday and Monday’s selloff.
I also went back and looked at a broader range of time to compare the performance between FCPEX and FSSVX. I looked at the 1 year, 3 year and 5 year time frames and the results were the same: FSSVX consistently outperforms.
Unfortunately I don’t recall the reasoning for why I selected FCPEX, the best I could come up with was the low minimum investment of $2,500 and low expense ratio of 0.67%. After this analysis of FCPEX’s subpar performance I decided to drop the fund from my IRA portfolio. Overall it’s 0.8% return hasn’t hurt me too badly, it was just a small fraction of my Small Cap allocation and an even smaller portion of my overall portfolio. The lesson here is you need to keep a close eye on all your investments to ensue they are performing as expected.