There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Lrg Cap Growth Enhance Inx FLGEX . FLGEX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
FLGEX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FLGEX. The Fidelity Lrg Cap Growth Enhance Inx made its debut in May of 2007 and FLGEX has managed to accumulate roughly $1,022.83 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 16.93%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 12.43%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 11.49%, the standard deviation of FLGEX over the past three years is 10.48%. Over the past 5 years, the standard deviation of the fund is 9.93% compared to the category average of 10.91%. This makes the fund less volatile than its peers over the past half-decade.
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. FLGEX lost 47.5% in the most recent bear market and outperformed its peer group by 1.38%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Investors should note that the fund has a 5-year beta of 1.02, so it is likely going to be as volatile as the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. FLGEX has generated a positive alpha over the past five years of 0.79, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.
This fund is currently holding about 98.97% stock in stocks, and these companies have an average market capitalization of $231.78 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is about 110%, so those in charge of the fund make more trades in a given year than the average of comparable funds.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FLGEX is a no load fund. It has an expense ratio of 0.40% compared to the category average of 1.14%. So, FLGEX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.
Overall, Fidelity Lrg Cap Growth Enhance Inx has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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