Markets

Is Fidelity Series Growth Company (FCGSX) a Strong Mutual Fund Pick Right Now?

Having trouble finding a Large Cap Growth fund? Fidelity Series Growth Company (FCGSX) is a potential starting point. FCGSX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FCGSX 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 responsible for FCGSX, and the company is based out of Boston, MA. Since Fidelity Series Growth Company made its debut in November of 2013, FCGSX has garnered more than $11.10 billion in assets. The fund is currently managed by Steven S. Wymer who has been in charge of the fund since November of 2013.

Performance

Investors naturally seek funds with strong performance. FCGSX has a 5-year annualized total return of 14.37% But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 15.14%, which places it in the top 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. FCGSX's standard deviation over the past three years is 15.07% compared to the category average of 11.77%. Over the past 5 years, the standard deviation of the fund is 14.27% compared to the category average of 11.85%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of.

Even still, the fund has a 5-year beta of 1.25, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a positive alpha of 0.88, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Examining 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 largely on equities that are traded in the United States.

The mutual fund currently has 96.71% of its holdings in stocks, which have an average market capitalization of $319.36 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Retail Trade
  3. Health

Expenses

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, FCGSX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 1.10%. From a cost perspective, FCGSX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

Bottom Line

Overall, Fidelity Series Growth Company ( FCGSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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