Back to top

Image: Bigstock

Is Fidelity New Millennium (FMILX) a Strong Mutual Fund Pick Right Now?

Read MoreHide Full Article

Any investors hoping to find an All Cap Growth fund could think about starting with Fidelity New Millennium (FMILX - Free Report) . FMILX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that FMILX is an All Cap Growth option, and is loaded with different selections. All Cap Growth mutual funds look to invest in a wide variety of equities, no matter the size of the company and as long as the firm exhibits growth characteristics. In order to increase diversification, these portfolios have holdings across small, medium, and large-cap levels.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FMILX. Fidelity New Millennium made its debut in December of 1992, and since then, FMILX has accumulated about $2.68 billion in assets, per the most up-to-date date available. John D. Roth is the fund's current manager and has held that role since July of 2006.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 14.13%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 12.27%, 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 19.02%, the standard deviation of FMILX over the past three years is 20.97%. Looking at the past 5 years, the fund's standard deviation is 16.85% compared to the category average of 15.53%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.06, the fund is likely to be more volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -2.38, which shows that 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 mostly on equities that are traded in the United States.

Right now, 86.97% of this mutual fund's holdings are stocks, which have an average market capitalization of $77.33 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance
  2. Industrial Cyclical
  3. Technology
Turnover is 22%, which means this fund makes fewer trades than its comparable peers.

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, FMILX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 1.03%. Looking at the fund from a cost perspective, FMILX is actually cheaper than its peers.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity New Millennium ( FMILX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.

Your research on the All Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Fidelity New Millennium (FMILX) - free report >>

Published in