Is Fidelity Large Cap Growth Enhance Index (FLGEX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Growth fund? Fidelity Large Cap Growth Enhance Index (FLGEX) is a potential starting point. FLGEX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FLGEX 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
FLGEX is a part of the Fidelity family of funds, a company based out of Boston, MA. The Fidelity Large Cap Growth Enhance Index made its debut in May of 2007 and FLGEX has managed to accumulate roughly $1.05 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 11.94%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 15.26%, 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. FLGEX's standard deviation over the past three years is 12.42% compared to the category average of 13.01%. Over the past 5 years, the standard deviation of the fund is 12.07% compared to the category average of 12.62%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In FLGEX's case, the fund lost 47.5% in the most recent bear market and outperformed its peer group by 1.34%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.04, so investors should note that it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a positive alpha over the past 5 years of 0.53, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Currently, this mutual fund is holding 98.31% stock in stocks, with an average market capitalization of $334.70 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Turnover is 100%, which means, on average, the fund makes more trades in a given year than the category average.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FLGEX is a no load fund. It has an expense ratio of 0.39% compared to the category average of 1.05%. So, FLGEX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Large Cap Growth Enhance Index ( FLGEX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
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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