Are you on the hunt for a Large Cap Value fund? You should think about starting with Fidelity Large Cap Value Enhance Index (FLVEX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
Fidelity is responsible for FLVEX, and the company is based out of Boston, MA. Since Fidelity Large Cap Value Enhance Index made its debut in May of 2007, FLVEX has garnered more than $6.19 billion in assets. The fund is currently managed by a team of investment professionals.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.92%, and is in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 12.1%, 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. FLVEX’s standard deviation over the past three years is 19.75% compared to the category average of 16.7%. The fund’s standard deviation over the past 5 years is 16.08% compared to the category average of 13.94%. 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 1.01, so it is likely going to be as volatile as 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. FLVEX has generated a negative alpha over the past five years of -4.43, demonstrating that managers in this portfolio find it difficult to pick 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 92.73% stock in stocks, and these companies have an average market capitalization of $158.58 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
This fund’s turnover is about 60%, so the fund managers are making more trades in a given year than the category average.
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, FLVEX is a no load fund. It has an expense ratio of 0.39% compared to the category average of 1%. From a cost perspective, FLVEX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
This could just be the start of your research on FLVEXin the Large 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. 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.