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 OTC Portfolio K (FOCKX). FOCKX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
FOCKX 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 FOCKX. Since Fidelity OTC Portfolio K made its debut in May of 2008, FOCKX has garnered more than $8.07 billion in assets. Christopher Lin is the fund’s current manager and has held that role since September of 2017.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 26.86%, and it sits in the top third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3-year annualized total return of 27.19%, 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. The standard deviation of FOCKX over the past three years is 21.34% compared to the category average of 17.56%. Looking at the past 5 years, the fund’s standard deviation is 17.52% compared to the category average of 14.47%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.06, so it is likely going to be 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. FOCKX has generated a positive alpha over the past five years of 7.48, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 mostly on equities that are traded in the United States.
Right now, 79.02% of this mutual fund’s holdings are stocks, which have an average market capitalization of $593.73 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
This fund’s turnover is about 24%, so the fund managers are making fewer trades than the average comparable fund.
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, FOCKX is a no load fund. It has an expense ratio of 0.72% compared to the category average of 1.02%. So, FOCKX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Overall, Fidelity OTC Portfolio K ( FOCKX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity OTC Portfolio K ( FOCKX ) looks like a good potential choice for investors right now.
Your research on the Large Cap Growth segment doesn’t have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.