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15 Top Performing Fidelity Funds in Q32015

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The performance of Fidelity mutual funds fell in the third quarter from the second quarter and mirrored the broader trend of declining returns in July–September 2015. The third quarter of 2015 ended up giving the worst performance for the benchmarks since Sep 2011. In the third quarter, the Dow, S&P 500 and Nasdaq declined 7.6%, 7% and 7.4%, respectively.

Obviously, it was difficult for mutual funds as well. In fact, calling the third quarter a bloodbath will not be far from the truth. Just 17% of mutual funds managed to finish in the green in the third quarter. This was a slump from 41% in the second quarter, which was also a sharp fall from 87% of the funds that ended in the positive territory in the first quarter.

Reflecting the broader trend of slumping returns, Fidelity’s top-gainer in the third quarter, Fidelity Spartan Long Treas Adv , could post only 5.5% return. In fact, except for this fund’s Investor class fund, Fidelity Spartan Long Treas Inv , there was no other that managed a 5% plus gain. The majority of gainers in the third quarter posted flimsy returns of 1–2%. However, FLBAX’s gain of 5.5% helped Fidelity to beat other key fund families, which we will discuss later.

Fidelity’s Performance in Q3 vs. Q2

Out of the 971 funds we studied, just 111 funds managed to finish in the green. However, the gains were very modest as all these funds posted an average gain of 1.2%. In comparison, 504 funds out of 950 funds had finished in the positive territory in the second quarter.

But the larger concern here is that while only 22 funds suffered above 5% loss in the second quarter, 655 funds ended the third quarter with more than 5% negative returns. Out of the 857 funds that finished in the red in the third quarter, 189 funds lost at least 10%. The average loss for these 857 funds was a worrying 8%. (Note: These numbers include same funds of different classes)

The biggest loser among the Fidelity funds in the third quarter was Fidelity Adv China Region C (FCHKX), which nosedived 26.3%. This is completely in contrast to what happened in the second quarter, when Fidelity’s best gainer Fidelity China Region Fund (FHKCX) added 11.6%. China region funds were robust gainers in the second quarter and the country was the third-best category performer in the first half of 2015 as well.

However this time, the worst performer is the China category. This is a result of the market rout that the China region suffered since mid June. In fact, China-led global growth worries were primarily responsible for the market rout in key markets across the globe; eventually pushing most mutual funds lower.

Also, the 11.6% gain from FHKCX had helped Fidelity to beat other prominent fund families like Vanguard, BlackRock and American Funds to mention a few in the second quarter. In the third quarter, Fidelity failed to beat Vanguard, the best gain of which hit 8.4% by Vanguard Extended Duration Treasury Index Fund Institutional (VEDTX). In a quarter ravaged by headwinds, mutual funds from the Vanguard Group gave a decent performance.

However, Fidelity managed to beat both BlackRock and American Funds. From the American Funds stable, American Funds US Govt Sec R5 (RGVFX) was the best performer with timid gains of 1.7% in the quarter. BlackRock’s best performer was Blackrock US Real Estate Sec Str I (BIREX), which gained 2.4%. Franklin Templeton ’s best gainer also belonged to the Real Estate category. Franklin Real Estate Sec R6 (FSERX) gained 3.4%, falling short of Fidelity.

Watch out for our Mutual Fund Commentary section in the coming days, wherein we will be reporting on performances and best picks from fund families and varied categories.

Top 15 Fidelity Funds in Q3

Below we present the top 15 Fidelity funds with best returns in 3Q2015:

Fund Name

Objective Description

Q3 Total Return

Q3 % Rank vs Obj

YTD Total Return

% Yield

Expense Ratio

Beta vs S&P 500

Load

Fidelity Spartan Long Treas Inv

Government

5.49

1

-

2.55

0.2

-0.06

N

Fidelity Select Retailing

Other

3.17

1

9.78

0.22

0.81

1.03

N

Fidelity Spartan Rl Est Index Inv

Real Est

2.84

10

-3

2.25

0.23

0.53

N

Fidelity Real Estate Investment

Real Est

2.76

12

-2.7

1.62

0.78

0.51

N

Fidelity Spartan Inter Treas Inv

Government

2.59

4

2.98

1.79

0.2

-0.01

N

Fidelity Adv CA Muni Inc A

Muni CA

1.7

37

1.69

2.87

0.79

-0.02

Y

Fidelity Adv NY Muni Income A

Muni NY

1.59

23

1.91

2.69

0.78

-0.03

Y

Fidelity Series Real Estate Eqty

Real Est

1.59

40

-3.65

1.56

0.75

0.54

N

Fidelity Adv Muni Income A

Muni Natl

1.49

26

1.32

3.14

0.8

-0.01

Y

Fidelity Adv Real Estate Fund A

Real Est

1.44

41

-3.93

1.27

1.11

0.55

Y

Fidelity Government Income Fund

Government

1.41

10

1.33

1.35

0.45

-0.01

N

Fidelity Adv Government Income A

Government

1.33

11

1.09

1.04

0.77

-0.01

Y

Fidelity Mortgage Securities

Govt-Mtg

1.32

11

1.78

2.14

0.46

0.01

N

Fidelity Spartan US Bond Index Inv

Corp-Inv

1.28

3

0.99

2.28

0.22

-

N

Fidelity Adv Mortgage Secs A

Govt-Mtg

1.24

16

1.51

1.79

0.82

0.01

Y

Note: The list excludes the same funds with different classes, and institutional funds have been excluded. Funds having minimum initial investment above $5000 have been excluded.
Q3 % Rank vs Objective* equals the percentage the fund falls among its peers. Here, 1 being the best and 99 being the worst.

The best 15 Vanguard mutual fund performers are primarily from three varied categories. These are Government Bond, Real Estate and Municipal Bond mutual funds. This was expected, as Long Government was the second best performing category in the third quarter, according to Morningstar.

From this category, four funds made it to the best gainers’ list. These are Fidelity Spartan Long Treas Inv, Fidelity Spartan Inter Treas Inv , Fidelity Government Income Fund (FGOVX - Free Report) and Fidelity Adv Government Income A (FVIAX - Free Report) . While FLBIX and FIBIX carry a Zacks Mutual Fund Rank #1 (Strong Buy), FGOVX and FVIAX carry a Zacks Mutual Fund Rank #2 (Buy). Meanwhile, Fidelity Mortgage Securities (FMSFX - Free Report) and Fidelity Adv Mortgage Secs A (FMGAX - Free Report) from the Government Mortgage category also found a place in the list. Both FMSFX and FMGAX carry a Zacks Mutual Fund Rank #1.

Separately, many sub Municipal fund categories, such as Muni California Long, Muni Pennsylvania and Muni New York Long, featured in the top performers’ list for the third quarter. However, the gains were modest, with Muni California Long performing the best, notching up a 1.7% gain in the quarter.

Three funds from this category, Fidelity Adv CA Muni Inc A (FCMAX - Free Report) , Fidelity Adv NY Muni Income A (FNMAX - Free Report) and Fidelity Adv Muni Income A ( FAMUX) featured in the best performers’ list. While FCMAX and FNMAX carry a Strong Buy rank, FAMUX has a Zacks Mutual Fund Rank #3 (Hold).

Apart from the Government and Municipal categories, Real Estate was also in the top list of fund category performers. The sector returned nearly 1.4% in the third quarter. Four Fidelity funds feature in the list of the top 15 gainers. These are Fidelity Spartan Rl Est Index Inv (FRXIX), Fidelity Real Estate Investment (FRESX), Fidelity Series Real Estate Eqty (FREDX) and Fidelity Adv Real Estate Fund A ( FHEAX).

However, FRESX and FHEAX carry a Zacks Mutual Fund Rank #4 (Sell) and Zacks Mutual Fund Rank #5 (Strong Sell). FRXIX is the only fund here that carries a Zacks Mutual Fund Rank #1 while FREDX carries a Zacks Mutual Fund Rank #3 (Hold).

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Pick the best mutual funds with the Zacks Rank.



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