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Is Fidelity Dividend Growth Fund (FDGFX) a Strong Mutual Fund Pick Right Now?
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Large Cap Blend fund seekers should consider taking a look at Fidelity Dividend Growth Fund (FDGFX - Free Report) . FDGFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that FDGFX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
Fidelity is responsible for FDGFX, and the company is based out of Boston, MA. Fidelity Dividend Growth Fund made its debut in April of 1993, and since then, FDGFX has accumulated about $4.06 billion in assets, per the most up-to-date date available. Gordon Scott is the fund's current manager and has held that role since April of 2017.
Performance
Of course, investors look for strong performance in funds. FDGFX has a 5-year annualized total return of 1.53% and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -1.04%, which places it in the bottom 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 11.53%, the standard deviation of FDGFX over the past three years is 18.32%. The fund's standard deviation over the past 5 years is 15.62% compared to the category average of 11.18%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, FDGFX lost 56% and underperformed its peer group by 6%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.1, so investors should note that it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -5.17, which shows that 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 largely on equities that are traded in the United States.
The mutual fund currently has 98.83% of its holdings in stocks, which have an average market capitalization of $135.46 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Non-Durable
Turnover is 64%, which means this fund makes more trades in a given year than the average of 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, FDGFX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 1.01%. FDGFX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Dividend Growth Fund ( FDGFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Fidelity Dividend Growth Fund ( FDGFX ) looks like a great potential choice for investors right now.
Want even more information about FDGFX? 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. 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 Dividend Growth Fund (FDGFX) a Strong Mutual Fund Pick Right Now?
Large Cap Blend fund seekers should consider taking a look at Fidelity Dividend Growth Fund (FDGFX - Free Report) . FDGFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that FDGFX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
Fidelity is responsible for FDGFX, and the company is based out of Boston, MA. Fidelity Dividend Growth Fund made its debut in April of 1993, and since then, FDGFX has accumulated about $4.06 billion in assets, per the most up-to-date date available. Gordon Scott is the fund's current manager and has held that role since April of 2017.
Performance
Of course, investors look for strong performance in funds. FDGFX has a 5-year annualized total return of 1.53% and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -1.04%, which places it in the bottom 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 11.53%, the standard deviation of FDGFX over the past three years is 18.32%. The fund's standard deviation over the past 5 years is 15.62% compared to the category average of 11.18%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, FDGFX lost 56% and underperformed its peer group by 6%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.1, so investors should note that it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -5.17, which shows that 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 largely on equities that are traded in the United States.
The mutual fund currently has 98.83% of its holdings in stocks, which have an average market capitalization of $135.46 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Industrial Cyclical
- Non-Durable
Turnover is 64%, which means this fund makes more trades in a given year than the average of 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, FDGFX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 1.01%. FDGFX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Dividend Growth Fund ( FDGFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Fidelity Dividend Growth Fund ( FDGFX ) looks like a great potential choice for investors right now.
Want even more information about FDGFX? 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. 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.