There are plenty of choices in the Mid Cap Value category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Value Fund (FDVLX). FDVLX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
FDVLX is one of many Mid Cap Value mutual funds to choose from. Mid Cap Value funds usually invest in companies with a stock market valuation between $2 billion and $10 billion; these medium-sized firms possess strong value and income opportunities for investors.
History of Fund/Manager
Fidelity is responsible for FDVLX, and the company is based out of Boston, MA. Fidelity Value Fund made its debut in December of 1978, and since then, FDVLX has accumulated about $8.21 billion in assets, per the most up-to-date date available. The fund’s current manager is a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FDVLX has a 5-year annualized total return of 13.34% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.16%, 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. FDVLX’s standard deviation over the past three years is 28.51% compared to the category average of 19.83%. Over the past 5 years, the standard deviation of the fund is 22.45% compared to the category average of 16.12%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 1.37, so investors should note that it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -8.49. This means that managers in this portfolio find it difficult to pick 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.
The mutual fund currently has 75.22% of its holdings in stocks, which have an average market capitalization of $14.93 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
With turnover at about 83%, this fund makes more trades in a given year than the category average.
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, FDVLX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.11%. FDVLX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Overall, Fidelity Value Fund ( FDVLX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, Fidelity Value Fund ( FDVLX ) looks like a good potential choice for investors right now.
This could just be the start of your research on FDVLXin the Mid Cap Value category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.