Any investors hoping to find a Large Cap Growth fund could think about starting with Fidelity Growth Discovery (FDSVX). FDSVX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
FDSVX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FDSVX. Since Fidelity Growth Discovery made its debut in March of 1998, FDSVX has garnered more than $2.91 billion in assets. Jason Weiner is the fund’s current manager and has held that role since February of 2007.
Of course, investors look for strong performance in funds. FDSVX has a 5-year annualized total return of 23.52% and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 22.5%, 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. FDSVX’s standard deviation over the past three years is 19.7% compared to the category average of 17.5%. The fund’s standard deviation over the past 5 years is 16.2% compared to the category average of 14.4%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 0.99, so investors should note that it is hypothetically as volatile as 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 6, 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 primarily on equities that are traded in the United States.
Right now, 78.97% of this mutual fund’s holdings are stocks, and these companies have an average market capitalization of $615.08 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
Turnover is about 51%, so those in charge of the fund make fewer trades than the average comparable fund.
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, FDSVX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.02%. Looking at the fund from a cost perspective, FDSVX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Overall, Fidelity Growth Discovery ( FDSVX ) 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 the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FDSVX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.