August 30, 2021 5 min read
This story originally appeared on Zacks
If you’ve been stuck searching for Large Cap Growth funds, consider Fidelity Large Cap Growth Enhance Index (FLGEX) as a possibility. FLGEX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
FLGEX 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
FLGEX finds itself in the Fidelity family, 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 $1.73 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FLGEX has a 5-year annualized total return of 21.55% 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 23.42%, 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. Over the past three years, FLGEX’s standard deviation comes in at 19.13%, compared to the category average of 16.7%. Looking at the past 5 years, the fund’s standard deviation is 15.54% compared to the category average of 13.94%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. FLGEX has a 5-year beta of 0.99, which means it is likely to be as volatile as the market average. 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. Over the past 5 years, the fund has a positive alpha of 3.77. This means that 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 principally on equities that are traded in the United States.
Right now, 83.9% of this mutual fund’s holdings are stocks, which have an average market capitalization of $404.46 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
With turnover at about 63%, this fund makes more trades in a given year than the category average.
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FLGEX is a no load fund. It has an expense ratio of 0.39% compared to the category average of 1.02%. Looking at the fund from a cost perspective, FLGEX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
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 FLGEX 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.
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