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Is Fidelity OTC Portfolio (FOCPX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Mid Cap Blend category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity OTC Portfolio (FOCPX - Free Report) . FOCPX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Mid Cap Blend mutual funds is an area filled with options, such as FOCPX. Mid Cap Blend funds expose investors to value picks, income opportunities, and exciting growth potential, but also gives some stability; these funds usually seek a stock portfolio of various size and style, which allows for diversification when the focus is on companies with market capitalization in the range of $2 billion to $10 billion.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FOCPX. Fidelity OTC Portfolio made its debut in December of 1984, and since then, FOCPX has accumulated about $12.92 billion in assets, per the most up-to-date date available. Sonu Kalra is the fund's current manager and has held that role since September of 2017.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 15.36%, and is in the top 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 21.83%, 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. The standard deviation of FOCPX over the past three years is 16.02% compared to the category average of 11.39%. The standard deviation of the fund over the past 5 years is 16.34% compared to the category average of 11.36%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. FOCPX lost 53.59% in the most recent bear market and underperformed comparable funds by 5%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.2, so investors should note that it is hypothetically more 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. Over the past 5 years, the fund has a positive alpha of 2.78. This means that managers in this portfolio are skilled in picking 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 94.55% of its holdings in stocks, with an average market capitalization of $372.47 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Turnover is 37%, which means, on average, the 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, FOCPX is a no load fund. It has an expense ratio of 0.87% compared to the category average of 1.05%. From a cost perspective, FOCPX 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 OTC Portfolio ( FOCPX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity OTC Portfolio ( FOCPX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is Fidelity OTC Portfolio (FOCPX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Mid Cap Blend category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity OTC Portfolio (FOCPX - Free Report) . FOCPX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Mid Cap Blend mutual funds is an area filled with options, such as FOCPX. Mid Cap Blend funds expose investors to value picks, income opportunities, and exciting growth potential, but also gives some stability; these funds usually seek a stock portfolio of various size and style, which allows for diversification when the focus is on companies with market capitalization in the range of $2 billion to $10 billion.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FOCPX. Fidelity OTC Portfolio made its debut in December of 1984, and since then, FOCPX has accumulated about $12.92 billion in assets, per the most up-to-date date available. Sonu Kalra is the fund's current manager and has held that role since September of 2017.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 15.36%, and is in the top 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 21.83%, 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. The standard deviation of FOCPX over the past three years is 16.02% compared to the category average of 11.39%. The standard deviation of the fund over the past 5 years is 16.34% compared to the category average of 11.36%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. FOCPX lost 53.59% in the most recent bear market and underperformed comparable funds by 5%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.2, so investors should note that it is hypothetically more 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. Over the past 5 years, the fund has a positive alpha of 2.78. This means that managers in this portfolio are skilled in picking 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 94.55% of its holdings in stocks, with an average market capitalization of $372.47 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
Turnover is 37%, which means, on average, the 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, FOCPX is a no load fund. It has an expense ratio of 0.87% compared to the category average of 1.05%. From a cost perspective, FOCPX 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 OTC Portfolio ( FOCPX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity OTC Portfolio ( FOCPX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.