Sheet Metal Workers' International Association
Local Union No.73
Pension Welfare and Annuity Funds
Comparing
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Fidelity utilizes Morningstar categories to help you make meaningful comparisons between investment options that may seem similar but that have very different investment styles. Morningstar, a global investment research firm and trusted source for investment information, data, and analysis of stocks, mutual funds, and annuities, analyzes an investment's underlying holdings rather than assigning a category to an investment option based on its objective. The information below will help you better understand your plan's investment options. |
What are mutual funds? |
When you participate in the plan, you do not invest directly in stocks, bonds, and short term investments. Rather, you invest in mutual funds, which are investments that pool your money with thousands of other investors who have similar goals. Each fund you select is managed with a goal of achieving certain objectives. For plan investors, mutual funds provide built in diversification, automatically spreading your money across an asset class, such as stocks, or across more than one asset class, which offers additional opportunities to help balance risk and potential returns. |
Money Market |
Money market investment options seek to provide high stability of principal while seeking a moderate level of current income. They typically invest in highly liquid, low risk, short term debt securities of agencies of the U.S. government, banks, and corporations. A debt security is evidence of a debt. It is sold to an investor with the promise that it will be paid with or without interest at the end of a specified period. Utilizing primarily short term investments, money market investment options seek to maintain a constant share/unit price, although the return may fluctuate. Because the price of each share/unit tends to stay at $1, investors often use these investments to temporarily hold money to be invested later. An investment in a money market investment option is not insured or guaranteed by the FDIC or any other government agency. Although money market investment options seek to preserve the value of your investment at $1 per share/unit, it is possible to lose money by investing in these investment options. |
Stable Value |
A managed income or stable value investment option is a type of fixed income investment option typically available to participants in defined contribution plans. The primary objective of this type of investment option is to preserve principal invested while providing a competitive level of income over time. The investment option pursues these objectives by investing in short and medium term debt instruments such as U.S. Treasury bonds, corporate bonds, mortgage backed securities, asset backed securities, and other debt securities, and by using insurance company or bank wrap agreements, which serve to aid in maintaining the stable unit price. This unit price is not guaranteed, however, and the yield of this type of investment will fluctuate over time, depending on market conditions. Because managed income or stable value funds will typically invest in longer term investments than would a money market fund, they may potentially offer higher long term returns. These investment options are not SEC registered mutual funds. |
Bond |
Bond investment options seek to provide a level of current income by investing primarily in debt securities. Bond investment options are typically made up of individual bonds within a specified range of maturity, credit quality, and type of issuer. Bond investment options may invest in government bonds, corporate bonds, mortgage and asset backed securities and other debt instruments, or a combination of these. The level of risk involved in investment in a bond investment option depends on the term to maturity, credit quality, and other relevant characteristics of the underlying debt instruments owned by the investment option. Some bond investment options hold foreign debt securities or securities that may involve more risk than other similar investments based on ratings assigned by organizations such as Moodys and Standard & Poor's. Most bond investment options pay regular income; however, the amount of each payment varies with market conditions and changes in option holdings, as does the option's value per unit. A bond investment option may not provide the amount of income originally anticipated, especially during periods of extreme market fluctuation; however, its share/unit price tends to fluctuate less than that of a stock fund. |
Balanced/Hybrid |
Balanced or hybrid investment options typically maintain a mixed portfolio of bonds, preferred stocks, common stocks, and money market instruments. Balanced/hybrid investment options provide investors with a more conservative investment approach than pure stock investments, and a more aggressive approach than pure bond investments. These investment options tend to focus on providing a level of current income to their investors while providing the opportunity for capital appreciation via the stock component of the portfolio. By investing in a combination of stocks and bonds, investors can benefit from the long term growth potential of stocks, as well as the lower level of volatility associated with bonds. |
Domestic EquityLarge Value |
These investment options invest primarily in large U.S. stocks that are value Large Value oriented. Stocks in the top 70% of the capitalization (capitalization is the total equity market value of the company expressed in millions of dollars) of the U.S. equity market are defined as large cap. Value is defined based on a strong value style (low price ratios and high dividend yields) and a weak growth style (low growth rates for earnings, sales, book value, and cash flow). The share/unit price of a stock investment will fluctuate in response to the activities of individual companies within the investment, as well as to general market and economic conditions. Large capitalization companies may have less growth potential than smaller companies and may be able to react less quickly to changes in the market place, although they generally offer less volatility than smaller investment options. |
| Large Blend | These investment options invest in a variety of large U.S. stocks. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap. The blend style is assigned to investment options for which neither growth nor value characteristics predominate. The share/unit price of a stock investment option will fluctuate in response to the activities of individual companies within the investment option, as well as to general market and economic conditions. Large capitalization companies may have less growth potential than smaller companies and may be able to react less quickly to changes in the marketplace, although they generally offer less volatility than smaller companies. |
| Large Growth | These investment options invest primarily in large U.S. stocks that are growth oriented. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap. Growth is defined based on a strong growth style (high growth rates for earnings, sales, book value, and cash flow) and a weak value style (high price ratios and low dividend yields). The share/unit price of a stock investment will fluctuate in response to the activities of individual companies within the investment option, as well as to general market and economic conditions. Large capitalization companies may have less growth potential than smaller companies and may be able to react less quickly to changes in the marketplace, although they generally offer less volatility than smaller companies. |
| Mid Value | These investment options Invest primarily in mid cap U.S. stocks that are value oriented. Stocks that fall between 70% and 90% of the capitalization of the U.S. equity market are defined as mid cap. Value is defined based on a strong value style (low price ratios and high dividend yields) and a weak growth style (low growth rates for earnings, sales, book value, and cash flow). The share/unit price for this type of investment may be volatile, as investments in mid sized companies may involve greater risk than those in larger, more well known companies, but may be less volatile than investments in smaller companies. |
| Mid Growth | These investment options invest primarily in mid cap U.S. stocks that are growth oriented. Stocks that fall between 70% and 90% of the capitalization of the U.S. equity market are defined as mid cap. Growth is defined based on a strong growth style (high growth rates for earnings, sales, book value, and cash flow) and a weak value style (high price ratios and low dividend yields). The share/unit price for this type of investment may be volatile, as investments in mid sized companies may involve greater risk than those in larger, more well known companies, but may be less volatile than investments in smaller companies. |
International/ |
International investment options invest assets in securities whose primary trading markets are outside the United States, while global equity investment options typically invest in securities within the domestic U.S. market as well as worldwide. Some of these investment options diversify their investments across a broad range of markets and securities, while others may target a particular country or region, or a particular sector such as technology stocks. Targeted investment options are generally more volatile than broadly diversified funds. Foreign investments, particularly those in emerging markets, may involve greater risk than U.S. investments. This risk, especially in emerging markets, includes the political and economic uncertainties of foreign countries, as well as the risk of currency fluctuation. |
| Life-Cycle Fidelity Freedom Funds |
Fidelity Freedom Funds are designed for participants who want a simple yet diversified approach to investing for retirement. The Fidelity Freedom Funds invest in other Fidelity mutual funds to provide moderate asset allocation. The allocation strategy among the underlying sock, bond, and money market funds that compose each Freedom fund with a target retirement date is based on the number of years until that date and will become more conservative as that date nears. The Fidelity Freedom Income Fund, designed for those already in retirement, emphasizes bond and money market mutual funds and seeks to maintain a stable asset allocation from year to year. Share price, yield, and return will vary, and you may have a gain or a loss when you sell your shares. |