FDN is a passively managed index fund that tracks the Dow Jones Internet Composite Index, and it has been underwater for the full first half of 2026, a period in which its benchmark rose and broad technology benchmarks rose more. The fund's structure is simple: it holds the index constituents with minimal active overlay, and its results track the index closely after fees.
Net asset value fell 1.68% in the first half, while the S&P IT Index returned 22.90% over the same span. Net assets fell to $4.98 billion from $6.55 billion at year-end, driven by net redemptions in the first half. The redemption wave reflected a broader rotation away from high-valuation growth names in the U.S. equity market.
The fund lost $212.9 million from operations in the first half, against a gain of $691.3 million in the prior year. The divergence between those two results raises a direct question about the fund's cost structure. It also raises a question about the fund's ability to hold retail money at a 0.50% expense ratio while underperforming both its own index and its broader technology benchmark by meaningful margins. That combination of fee drag and underperformance is the core tension in the fund's value proposition.