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Is Fidelity Equity-Income Fund (FEQIX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Large Cap Value funds, consider Fidelity Equity-Income Fund (FEQIX - Free Report) as a possibility. FEQIX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
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 based in Boston, MA, and is the manager of FEQIX. Fidelity Equity-Income Fund debuted in May of 1966. Since then, FEQIX has accumulated assets of about $7.38 billion, according to the most recently available information. The fund's current manager, Ramona Persaud, has been in charge of the fund since October of 2011.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 10.91%, 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 9.4%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, FEQIX's standard deviation comes in at 14.65%, compared to the category average of 15.42%. The fund's standard deviation over the past 5 years is 16.32% compared to the category average of 17.06%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.83, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -1.49, 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 primarily on equities that are traded in the United States.
The mutual fund currently has 86.53% of its holdings in stocks, with an average market capitalization of $195.21 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Technology
Turnover is about 22%, so those in charge of the fund make fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FEQIX is a no load fund. It has an expense ratio of 0.57% compared to the category average of 0.93%. So, FEQIX 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.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Fidelity Equity-Income Fund ( FEQIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Equity-Income Fund ( FEQIX ) looks like a good potential choice for investors right now.
This could just be the start of your research on FEQIXin 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.
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Is Fidelity Equity-Income Fund (FEQIX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Large Cap Value funds, consider Fidelity Equity-Income Fund (FEQIX - Free Report) as a possibility. FEQIX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
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 based in Boston, MA, and is the manager of FEQIX. Fidelity Equity-Income Fund debuted in May of 1966. Since then, FEQIX has accumulated assets of about $7.38 billion, according to the most recently available information. The fund's current manager, Ramona Persaud, has been in charge of the fund since October of 2011.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 10.91%, 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 9.4%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, FEQIX's standard deviation comes in at 14.65%, compared to the category average of 15.42%. The fund's standard deviation over the past 5 years is 16.32% compared to the category average of 17.06%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.83, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -1.49, 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 primarily on equities that are traded in the United States.
The mutual fund currently has 86.53% of its holdings in stocks, with an average market capitalization of $195.21 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Industrial Cyclical
- Technology
Turnover is about 22%, so those in charge of the fund make fewer trades than comparable funds.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FEQIX is a no load fund. It has an expense ratio of 0.57% compared to the category average of 0.93%. So, FEQIX 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.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Fidelity Equity-Income Fund ( FEQIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Equity-Income Fund ( FEQIX ) looks like a good potential choice for investors right now.
This could just be the start of your research on FEQIXin 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.