There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Four Investor One Index Fund (FFNOX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
The world of Zacks’ Allocation Balanced funds is an area filled with options, such as FFNOX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
FFNOX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Four Investor One Index Fund made its debut in July of 1999 and FFNOX has managed to accumulate roughly $8.56 billion in assets, as of the most recently available information. The fund is currently managed by Andrew Dierdorf who has been in charge of the fund since January of 2009.
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 13.31%, 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 13.79%, 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. FFNOX’s standard deviation over the past three years is 15.99% compared to the category average of 16.7%. The fund’s standard deviation over the past 5 years is 12.81% compared to the category average of 13.94%. This makes the fund less volatile than its peers over the past half-decade.
With a 5-year beta of 0.84, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -1.26, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, FFNOX is a no load fund. It has an expense ratio of 0.08% compared to the category average of 0.89%. FFNOX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Your research on the Allocation Balanced 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. Zacks provides a full suite of tools to help you analyze your portfolio – both funds and stocks – in the most efficient way possible.
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