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Valued Contributor

FRIFX + FRESX?

I’ve owned FRIFX in one of my Fido IRAs for a few years. It had a slow start, but eventually picked up steam and has done pretty OK.

I see that FRESX also has a good record under the same manager for 22 years ... unusual at Fidelity.

Wondering if others use one or the other or both...?

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Valued Contributor

Re: FRIFX + FRESX?

Another idea. I don't see RE as a good diversifier sector to stocks LT but I see Utilities as a better choice.  If I want to own higher SD category I would own QQQ LT.  I would own VNQ (ER=0.12%) instead of FRESX (ER=0.74%).  FRIFX for me is more a unique and worth holding fund with about equal stocks to bonds (mostly HY+ CMBS)

This is 15 years from PV (link)

PortfolioCAGRStdevBest YearWorst YearMax. DrawdownSharpe RatioSortino Ratio
XLU9.82% 12.95%28.73%-28.93%-38.05% 0.690.99
FRESX8.56% 22.92%32.89%-38.21%-71.37% 0.420.61
QQQ13.02% 17.13%54.68%-41.73%-49.74% 0.731.12
SPY9.18% 13.79%32.31%-36.81%-50.80% 0.620.89
VNQ(VG index)8.58% 22.27%35.30%-37.00%-68.30% 0.430.61
FRIFX6.98% 8.50%46.82%-31.02%-38.63% 0.680.96
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Valued Contributor

Re: FRIFX + FRESX?

Thanks FD. FRIFX looks pretty good in your table.

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Valued Contributor

Re: FRIFX + FRESX?

FRIFX is a real-estate hybrid [equity + bonds + convertibles/preferreds] with lower volatility.

FRESX is real-estate equity [REITs, REOCs] with higher volatility.

YBB
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Explorer ○○

Re: FRIFX + FRESX?


I have had very small starter positions in both since late summer.  They haven’t done much — FRIFX is up just under 2 percent and FRESX did a random walk but ended up at the same place, basically.  I plan on adding to both, for at least a three year trial period.

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Participant ○

Re: FRIFX + FRESX?

I would be interested in knowing how utilities performed in a rising inflation environment .  I suspect better than SPY but empirical evidence can always surprise. 

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Explorer ○○○

Re: FRIFX + FRESX?

I have invested in both FRESX and FRIFX for many years. Started out with FRESX in the late 1990s, and it was the star of my portfolio through the 2000-02 bear market and the mid-2000s. It crashed hard in 2008, but I had preemptively rebalanced, so I preserved much of my gains. I didn’t bail during the crash, and it rebounded nicely in 2009 and over the succeeding years. About 10 years ago, I split my RE allocation between FRIFX and FRESX to help lower the volatility of my portfolio. FRIFX has done all I expected and more, delivering solid returns with reasonable volatility. Its returns and volatility over the past 1,3,5, 10 years have been comparable to balanced funds or some of the better HY bond funds. Several years ago, I transferred all of my money that was in FRESX into FRIFX.

If you are obsessed with the short term volatility of individual funds, then RE is probably not for you. However, if you focus more on overall portfolio volatility and returns, then RE funds can be a solid addition to a portfolio. I consider FRIFX to be part of the income sleeve in my portfolio, comparable to a high yield bond fund. Its returns have exceeded the much vaunted PIMIX/PONAX over the past 1, 3, 5 and 10 years. Admittedly, its short term volatility is much higher than PIMIX/PONAX, but it can lower the overall portfolio of your portfolio because its returns often differ from both stock and bond funds. The same with FRESX.

I do not consider volatility to be bad in my investments. Its great, of course, when the markets are doing well. But it can also help you in flat or down markets if your different holdings are not perfectly correlated. If you rebalance when particular sectors have widely varying returns, you can do better over time. That’s how I have used FRESX/FRIFX in my portfolio, and it has worked for me over the past 20+ years — regardless of short-term risk measures. I do not concern myself with short term risk measures except for the parts of my portfolio that I might need to draw money from in the short term. Otherwise, it’s nearly meaningless data to me.

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Valued Contributor

Re: FRIFX + FRESX?


@Anitya wrote:

I would be interested in knowing how utilities performed in a rising inflation environment .  I suspect better than SPY but empirical evidence can always surprise. 


Are we having inflation now or in the next several years?  :-)

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Contributor ○

Re: FRIFX + FRESX?

@Dawgie  Nice post about FRIFX and very helpful.  I especially like how you described your perception of the fund's risk and volatility. 

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Valued Contributor

Re: FRIFX + FRESX?

You won't find many days like today when RE hybrid FRIFX -6.42% falls more than all-equity FRESX -4.09%.   https://finance.yahoo.com/quotes/FRESX,FRIFX/view/v1

YBB
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Participant ○○

Re: FRIFX + FRESX?

On the recommendation of my investing savvy son-in-law, I was in FRIFX for 2-3 years (several years ago) and it served me well.  Obviously wouldn't want it now, and probably will never own again as I become a tad more conservative than I already was. 

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Explorer ○○○

Re: FRIFX + FRESX?

In times of panic, there are few places to hide.

in more normal times, which has unfortunately meant near zero returns in CDs and bonds, I look at FRIFX as a bond alternative.  Is it more risky?  Sure.  More risky than junk bonds? No, not imho.

Since we won’t live long enough to get significant returns from most fixed income investments, bonds are most useful as a diversifier and risk mitigator.  FRIFX has similar qualities.

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Explorer ○○○

Re: FRIFX + FRESX?

Wow, really surprised at how much FRIFX has gone down in the last month. If you haven’t owned it, I think it is a pretty good buy.  I don’t see a long lasting real estate crisis coming out of the pandemic.

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