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Is Fidelity Mid-Cap Stock Fund (FMCSX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Mid Cap Blend fund could think about starting with Fidelity Mid-Cap Stock Fund (FMCSX - Free Report) . FMCSX possesses a Zacks Mutual Fund Rank of 1 (Strong 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 FMCSX. 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

FMCSX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Mid-Cap Stock Fund debuted in March of 1994. Since then, FMCSX has accumulated assets of about $5.12 billion, according to the most recently available information. John Roth is the fund's current manager and has held that role since February of 2011.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.24%, and is 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 9.31%, 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 FMCSX over the past three years is 21.21% compared to the category average of 18.54%. The fund's standard deviation over the past 5 years is 17.23% compared to the category average of 15.63%. 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 1.06, so it is likely going to be 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. FMCSX has generated a negative alpha over the past five years of -3.12, demonstrating 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 primarily on equities that are traded in the United States.

The mutual fund currently has 89.81% of its holdings in stocks, and these companies have an average market capitalization of $11.82 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance
  2. Other
  3. Technology
  4. Industrial Cyclical
With turnover at about 36%, this fund makes 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, FMCSX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 0.98%. So, FMCSX is actually cheaper than its peers from a cost perspective.

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 Mid-Cap Stock Fund ( FMCSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Mid-Cap Stock Fund ( FMCSX ) 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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