Contrafund versus Contrafund K

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joetro29
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Contrafund versus Contrafund K

Post by joetro29 »

I own both, the latter through work. The K class has .08% lower ER than the original but only outperformed the original by .03% this year. I thought the whole point of lower ER is that those savings increased NAV.

Why was outperformance less than the difference in ER?
Pandemic Bangs
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Re: Contrafund versus Contrafund K

Post by Pandemic Bangs »

I have the K shares. (NB, this is a non-BH thing I do in my work tax-deferred.)

Portfolio Visualizer shows the K shares outperforming by 0.11 for 2020, by 0.15 annually for 2019 through 2020 (inclusive), and by 0.13 annually from 2009 through 2020.

Where are your numbers from?
Wait 'til I get my money right | Then you can't tell me nothing, right?
Topic Author
joetro29
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Re: Contrafund versus Contrafund K

Post by joetro29 »

Morningstar YTD.
Topic Author
joetro29
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Re: Contrafund versus Contrafund K

Post by joetro29 »

Mine is in my work Roth and a huge amount in taxable. Turn off capital gains and dividends and now reinvest in index funds. They will also fund DAF in future.
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grabiner
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Re: Contrafund versus Contrafund K

Post by grabiner »

It's a rounding issue. The NAV of the share classes are 16.76 and 16.79, so a one-cent difference is .06% of the share price. Thus both share classes could gain .03% before rounding, but one class might go from 16.758 to 16.763 and report no gain, while the other class goes from 16.792 to 16.797 and reports a .06% gain.

Multiple-year returns can only be off by a cumulative .06% because of rounding, so the five-year returns of different share classes should differ by only .01% from the expense difference.
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joetro29
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Re: Contrafund versus Contrafund K

Post by joetro29 »

So just got moved from K to K6. Even better, with much lower expense ratio and some dividends. But, looking at Morningstar statistics, performance lags K. How is this possible?
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grabiner
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Re: Contrafund versus Contrafund K

Post by grabiner »

joetro29 wrote: Sat Apr 17, 2021 3:12 pm So just got moved from K to K6. Even better, with much lower expense ratio and some dividends. But, looking at Morningstar statistics, performance lags K. How is this possible?
If these are actually share classes of the same fund, there is something wrong with Morningstar's data. The fund returns for different years do not have a constant difference (K6 performed better in 2019, and K better in 2020), and the Portfolio tab, even with portfolios that are of the same date, shows different numbers; for example, the K class reports a higher average market cap.

Fidelity's own web site doesn't have a page for the K class.
Wiki David Grabiner
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joetro29
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Re: Contrafund versus Contrafund K

Post by joetro29 »

I guess I’m wondering why lower cost versions don’t have a higher performance that exactly parallels the ER amount difference. Lower ER means investors keep more, right?
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