Fidelity Strategic Dividend: An Overview

Fidelity Strategic Dividend Fund: Overview and Objectives

The Fidelity Strategic Dividend Fund (FSDIX) is a diversified equity fund that seeks to provide investors with high current income and long-term capital appreciation. The fund invests in a variety of dividend-paying stocks, including common stocks, real estate investment trusts (REITs), and convertible securities.

Investment Strategies and Approach of Fidelity Strategic Dividend

The investment team at Fidelity uses a quantitative approach to select stocks for the fund. The team looks for stocks with the following characteristics:

• High dividend yields
• Attractive valuations
• Strong financial fundamentals

The team also considers the following factors when selecting stocks:

• The company's dividend payout ratio
• The company's dividend growth history
• The company's industry sector

The fund's asset allocation is typically 50-60% common stocks, 15-20% REITs, and 15-20% convertible securities.

Performance and Historical Returns of the Fund

The Fidelity Strategic Dividend Fund has a strong track record of performance. Over the past 10 years, the fund has returned an average of 7.74% per year, compared to 6.78% for the S&P 500 Index.

The fund has also performed well during market downturns. For example, during the 2008 financial crisis, the fund lost only 16.32%, compared to a 37% loss for the S&P 500 Index.

Analyzing the Risk and Reward Profile of Fidelity Strategic Dividend

The Fidelity Strategic Dividend Fund is a moderately aggressive fund, which means that it has the potential to generate higher returns than more conservative funds, but it also has the potential for higher losses.

The fund's risk profile is due to the following factors:

• The fund invests in a variety of different asset classes, including stocks, REITs, and convertible securities.
• The fund invests in dividend-paying stocks, which are typically more volatile than non-dividend-paying stocks.
• The fund uses a quantitative approach to select stocks, which can lead to higher turnover and transaction costs.

Considerations for Investors Interested in Dividend Funds

Dividend funds can be a good option for investors who are looking for income and long-term capital appreciation. However, there are a few things that investors should consider before investing in a dividend fund:

• Dividend funds are not immune to market risk. The value of a dividend fund can go down, just like the value of any other investment.
• Dividend funds can experience higher volatility than non-dividend-paying funds. This is because dividend-paying stocks are typically more sensitive to changes in interest rates and economic conditions.
• Dividend funds may have higher transaction costs than non-dividend-paying funds. This is because dividend funds must often trade stocks in order to generate income for shareholders.

Investors should carefully consider their investment goals and risk tolerance before investing in any dividend fund.

Overall, the Fidelity Strategic Dividend Fund is a good option for investors who are looking for a diversified equity fund that provides high current income and long-term capital appreciation. The fund has a strong track record of performance and a moderate risk profile. However, investors should carefully consider their investment goals and risk tolerance before investing in any dividend fund.