Is Fidelity Asset Manager 85% (FAMRX) a Strong Mutual Fund Pick Right Now?

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Allocation Balanced fund seekers should consider taking a look at Fidelity Asset Manager 85% (FAMRX). FAMRX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.ObjectiveThe world of Zacks’ Allocation Balanced funds is an area filled with options, such as FAMRX. 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/ManagerFidelity is based in Boston, MA, and is the manager of FAMRX. Fidelity Asset Manager 85% debuted in September of 1999. Since then, FAMRX has accumulated assets of about $2.27 billion, according to the most recently available information. The fund is currently managed by Geoffrey Stein who has been in charge of the fund since June of 2009.PerformanceObviously, what investors are looking for in these funds is strong performance relative to their peers. FAMRX has a 5-year annualized total return of 14.33% and it sits in the top 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 14.39%, 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, FAMRX’s standard deviation comes in at 16.98%, compared to the category average of 15.13%. The standard deviation of the fund over the past 5 years is 13.6% compared to the category average of 12.45%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsThe fund has a 5-year beta of 0.88, so investors should note that it is hypothetically less 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. With a negative alpha of -1.44, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.ExpensesAs 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, FAMRX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 0.89%. So, FAMRX is actually cheaper than its peers from a cost perspective.Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.Bottom LineOverall, Fidelity Asset Manager 85% ( FAMRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.Want even more information about FAMRX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FAMRX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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