The Best of the Fidelity Selects Program

(This free service has now been put on hold and will be released as part of one of our sister services coming soon.)

An additional FREE feature from TSP Pilot, newly provided to current subscribers of record, is an optimized investment program designed for other investment funds that subscribers may have outside the Thrift Savings Plan in personal investment accounts. TSP Pilot uses the for testing purposes.

This Program is the result of many requests received from subscribers for a similar series of professional, quantitative and technically based fund timing and fund selection systems for funds subscribers may have outside the TSP plan.

TSP Pilot's "Best of the Fidelity Selects" or "FidSel" program is a custom designed, turn-key investment plan specifically targeting the funds currently available in the Fidelity Select Portfolio.

Our FidSel Program is best used in conjunction with our ETFs Program by splitting the commitment of your non-TSP funds approximately equally between the two Programs to diversify and reduce market risk exposure. (See Table XV).

The Fidelity Select Portfolio currently consists of 42 targeted sector funds efficiently spread across Health Care, Technology, Utilities, Consumer, Financial, Cyclicals and Natural Resources. TSP Pilot adds in another half-dozen non-Select Portfolio funds to round out the missing sectors. This brings the FidSel Program total coverage to 48 funds and 48 sectors.

TSP Pilot's FidSel Program is intended for only a portion of your non-TSP investment portfolio. It will not provide very much diversification since it usually takes positions only in the top two performing Fidelity Select sector funds.

The Fidelity Select Portfolio was chosen because of its significant history and its comprehensive available selection of high quality sector funds. There is a zero initial set up cost, relatively low early redemption fees (0.75% for fund holdings of less than 30 days) and a commission rate for funds bought online (which we advocate) of only $7.50.

Unfortunately, a recent trend in the mutual fund industry has been to charge increasingly exorbitant back-end or "early" redemption fees to discourage "frequent" fund switching. Fund switching may not be in the interest of the fund industry since it marginally increases their costs, but it certainly can be a major benefit to you by giving you the option to be in the strongest funds and to remain in concert with changing market directions--in this case via the FidSel Program.

The fund timing and fund selection methodology for the Fidelity Selects Portfolio is very similar to that used to guide investments in the TSP funds within the standard TSP Pilot Program for the Thrift Savings Plan. The projected historical results, however, are superior to those for the TSP Pilot Portfolio, in both risk and reward, for the simple reason that the Fidelity Select Portfolio provides a significantly wider selection of available funds/sectors from which to choose the optimal portfolio mix at any point in time.

An average of the complete Fidelity Select portfolio of sector funds has also historically provided a better adjusted performance, based on typical risk/reward ratios, than many of the broad market index funds.

Since Fidelity requires a 30 day hold for all purchases of funds in the Fidelity Select Portfolio our fund timing and fund selection system indicators have been specifically optimized for a minimum of a 30 day hold. Sales of securities within the Fidelity Select Portfolio are permitted but are charged an additional 0.75% early redemption fee (ERF).

Fund switches in the FidSel Program of less than 30 days will be held to a minimum. Any ERF's charged by Fidelity as a result of shorter than 30 day fund holding periods have already been factored into the FidSel historical performance results.

TSP Pilot has absolutely NO relationship with Fidelity investments and is not remunerated by them in any way, directly or indirectly, nor is the TSP Pilot FidSel program a revenue producer for TSP Pilot. The Fidelity Selects Portfolio was chosen as an investment alternative purely based on cost and performance considerations.

While TSP Pilot's FidSel Program is currently provided as a free additional service to regular TSP Pilot subscribers, at some point in the next several years, TSP Pilot may begin to charge for its FidSel Program separately for new subscribers.


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