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Is Fidelity Dividend Growth Fund (FDGFX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Large Cap Blend fund? Starting with Fidelity Dividend Growth Fund (FDGFX - Free Report) is one possibility. FDGFX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FDGFX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
FDGFX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Dividend Growth Fund made its debut in April of 1993, and since then, FDGFX has accumulated about $5.66 billion in assets, per the most up-to-date date available. Zachary Turner is the fund's current manager and has held that role since July of 2020.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FDGFX has a 5-year annualized total return of 11.46% and it sits 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 10.62%, 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. Over the past three years, FDGFX's standard deviation comes in at 21.3%, compared to the category average of 17.49%. Looking at the past 5 years, the fund's standard deviation is 16.98% compared to the category average of 14.55%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.08, which means 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. The fund has produced a negative alpha over the past 5 years of -5.05, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 90.24% of its assets in stocks, which have an average market capitalization of $237.09 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Industrial Cyclical
Turnover is about 136%, so those in charge of the fund make fewer trades than comparable funds.
Expenses
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, FDGFX is a no load fund. It has an expense ratio of 0.47% compared to the category average of 0.96%. So, FDGFX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Dividend Growth Fund ( FDGFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Fidelity Dividend Growth Fund ( FDGFX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Large Cap Blend funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FDGFX to its peers 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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Is Fidelity Dividend Growth Fund (FDGFX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Large Cap Blend fund? Starting with Fidelity Dividend Growth Fund (FDGFX - Free Report) is one possibility. FDGFX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FDGFX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
FDGFX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Dividend Growth Fund made its debut in April of 1993, and since then, FDGFX has accumulated about $5.66 billion in assets, per the most up-to-date date available. Zachary Turner is the fund's current manager and has held that role since July of 2020.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FDGFX has a 5-year annualized total return of 11.46% and it sits 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 10.62%, 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. Over the past three years, FDGFX's standard deviation comes in at 21.3%, compared to the category average of 17.49%. Looking at the past 5 years, the fund's standard deviation is 16.98% compared to the category average of 14.55%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.08, which means 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. The fund has produced a negative alpha over the past 5 years of -5.05, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 90.24% of its assets in stocks, which have an average market capitalization of $237.09 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Industrial Cyclical
Turnover is about 136%, so those in charge of the fund make fewer trades than comparable funds.Expenses
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, FDGFX is a no load fund. It has an expense ratio of 0.47% compared to the category average of 0.96%. So, FDGFX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Dividend Growth Fund ( FDGFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Fidelity Dividend Growth Fund ( FDGFX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Large Cap Blend funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FDGFX to its peers 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.