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Is Fidelity Small Cap Discovery Fund (FSCRX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Small Cap Growth fund could think about starting with Fidelity Small Cap Discovery Fund (FSCRX - Free Report) . FSCRX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FSCRX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSCRX. Fidelity Small Cap Discovery Fund made its debut in January of 2001, and since then, FSCRX has accumulated about $3.30 billion in assets, per the most up-to-date date available. The fund's current manager, Derek Janssen, has been in charge of the fund since March of 2016.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 12.52%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 13.42%, 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. Compared to the category average of 25.79%, the standard deviation of FSCRX over the past three years is 27.17%. Over the past 5 years, the standard deviation of the fund is 21.97% compared to the category average of 21.09%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.31, the fund is likely to be more 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. With a negative alpha of -8.25, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 81.6% of its assets in stocks, which have an average market capitalization of $5.67 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Services
Retail Trade
Other
Technology
Turnover is 33%, which means this fund makes fewer trades than comparable funds.
Expenses
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, FSCRX is a no load fund. It has an expense ratio of 0.61% compared to the category average of 1.10%. Looking at the fund from a cost perspective, FSCRX 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.
Bottom Line
Overall, Fidelity Small Cap Discovery Fund ( FSCRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Fidelity Small Cap Discovery Fund ( FSCRX ) looks like a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Small Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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.
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Is Fidelity Small Cap Discovery Fund (FSCRX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Small Cap Growth fund could think about starting with Fidelity Small Cap Discovery Fund (FSCRX - Free Report) . FSCRX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FSCRX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSCRX. Fidelity Small Cap Discovery Fund made its debut in January of 2001, and since then, FSCRX has accumulated about $3.30 billion in assets, per the most up-to-date date available. The fund's current manager, Derek Janssen, has been in charge of the fund since March of 2016.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 12.52%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 13.42%, 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. Compared to the category average of 25.79%, the standard deviation of FSCRX over the past three years is 27.17%. Over the past 5 years, the standard deviation of the fund is 21.97% compared to the category average of 21.09%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.31, the fund is likely to be more 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. With a negative alpha of -8.25, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 81.6% of its assets in stocks, which have an average market capitalization of $5.67 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Services
- Retail Trade
- Other
- Technology
Turnover is 33%, which means this fund makes fewer trades than comparable funds.Expenses
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, FSCRX is a no load fund. It has an expense ratio of 0.61% compared to the category average of 1.10%. Looking at the fund from a cost perspective, FSCRX 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.
Bottom Line
Overall, Fidelity Small Cap Discovery Fund ( FSCRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Fidelity Small Cap Discovery Fund ( FSCRX ) looks like a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Small Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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.