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Is Fidelity Small Cap Growth (FCPGX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Small Cap Growth fund might consider looking past Fidelity Small Cap Growth (FCPGX - Free Report) . FCPGX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FCPGX is part of the Small Cap Growth category, and this segment boasts an array of many other possible options. Small Cap Growth mutual funds usually focus their portfolios on stocks with large growth opportunities and a market cap of under $2 billion. These portfolios tend to feature small companies in up-and-coming industries and markets.

History of Fund/Manager

FCPGX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Small Cap Growth debuted in November of 2004. Since then, FCPGX has accumulated assets of about $4.54 billion, according to the most recently available information. The fund's current manager, Patrick Venanzi, has been in charge of the fund since November of 2011.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 21.12%, 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 18.62%, which places it in the middle 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 16.81%, the standard deviation of FCPGX over the past three years is 23.54%. Looking at the past 5 years, the fund's standard deviation is 18.87% compared to the category average of 13.81%. 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 1.09, which means 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. The fund has produced a positive alpha over the past 5 years of 2.36, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, FCPGX is a no load fund. It has an expense ratio of 1.02% compared to the category average of 1.21%. From a cost perspective, FCPGX 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 Small Cap Growth ( FCPGX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, Fidelity Small Cap Growth ( FCPGX ) looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Small Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FCPGX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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