Is Fidelity Series Growth Company (FCGSX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the large cap growth fund category, then Fidelity Series Growth Company (FCGSX) could be a possible option. FCGSX has Zacks Mutual Fund Rank 2 (Buy), based on nine predictive factors such as size, cost and past performance.
Objective
We classify FCGSX in the large cap growth category, which is an area with potential options. Large Cap Growth Funds: Invest in companies that are expected to grow much faster than other large-cap stocks. To be considered large-cap, companies must have a market cap of more than $10 billion.
Fund / Manager History
Fidelity is based in Boston, MA, and is the manager of FCGSX. Fidelity Series Growth Company made its debut in November 2013 and FCGSX has managed to amass around $14.22 billion in assets as per the most recent information available. The fund is currently managed by Steven Wiemer who has been in charge of the fund since November 2013.
Display
Of course, investors look for strong performance in funds. The fund has given an aggregate annualized return of 31.04 per cent for 5 years, and ranks third among its peers in the category. Investors who prefer to analyze shorter time frames should check out its 3-year annualized total return at 33.22%, which places it in the top third position during this time frame.
When looking at the performance of a fund, it is also important to take into account the standard deviation of returns. The lower the standard deviation, the less volatility the fund has. The standard deviation of the FCGSX over the past three years is 23.4% compared to the category average of 19.92%. The fund's standard deviation over the last 5 years is 19.21% as compared to the category average of 16.38%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.16, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric that should be taken into account, as it represents the performance of a portfolio on a risk-adjusted basis relative to the benchmark, which in this case is the S&P 500. Over the last 5 years, the fund has a positive alpha of 9.71. This means that the managers in this portfolio are skilled in choosing securities that generate better returns than the benchmark.
The Expense
As competition in the mutual fund market intensifies, cost becomes increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, it is important for investors to take a closer look at cost-related metrics. In terms of fees, FCGSX is a no load fund. It has an expense ratio of 1.12%, compared to the category average of 1.02%. So, from a cost perspective, FCGSX is actually more expensive than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum investment for each subsequent investment.
Bottom Line
Overall, Fidelity Series Growth Company (FCGSX) has a higher rank than Zacks Mutual Fund, and with the combination of its comparatively strong performance, average downside risk, and high fees, Fidelity Series Growth Company (FCGSX) is a great choice for investors. Looks like a good potential option. Now.
For additional information about the large cap growth segment of the mutual fund world, be sure to visit www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and also dive deeper into FCGSX for additional information. And don't forget, Jax has got all your needs covered on the equity side too! Be sure to check out Zacks.com for more information about our screening capabilities, ranks, and all of our articles.