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#939
USPFA Team
Member

Jeff,

Thanks for reaching out with your question.

As you know, we rank all of the funds in a plan relative to the funds in that particular plan. We generate a velocity score for each fund and then rank those funds in descending order, and use the 4 highest ranked funds.

So, how does a Fund get a high ranking? The system scans all of the funds in a plan and applies a proprietary screening process to identify those funds that have the greatest potential for an increase in price with the least amount of risk. We are looking for funds that have had a short term pull back in price or a bottom as we refer to it, and are steadily increasing in price. In order to qualify for a short term bottom there are criteria that have to be met. These criteria were triggered in other plans to trigger fund changes but in Fidelity they were not.

The answer really comes from looking “under the hood” at the funds in the plans. FedEx uses manly Vanguard indexed funds where the other plans use mainly actively managed funds. Among many differences, one difference is, in indexed funds it’s usually a smoother less volatile price movement where as in actively managed funds you get what we call “choppy” price action.

The end result is, although we did see some bottoming in the Fed Ex funds it just wasn’t enough for the system to make a change.

I hope this answers your question.

Regards,

Charlie