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4 Fidelity Mutual Funds to Bank on in Volatile Markets
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Inflation indicators in recent weeks have continued to dampen the mood of investors, staying at an alarmingly high level, with little to no evidence that it is going down anytime soon. It is still way off the Federal Reserve’s target rate of 2%, and even as other economic indicators show some signs of slowing down, a pause in rate hikes seems a distant dream.
The month of May had started with the hope that the 25 bps rate hike announced by the Fed from its latest FOMC meeting might be the last in its series of hikes aimed at combatting inflation, but with inflation numbers coming in hotter-than-expected, we are not so sure now.
The recent crisis in the regional banking sector, which started in March, has also contributed to keeping markets volatile. This has led to risk-off positioning, and trading has been choppy in recent weeks. Investors are rushing to safer waters and parking their money with less-speculative proven performers.
This is precisely why Fidelity Investments, the third-biggest fund family in the United States, with respect to assets under management, is expected to get more traction from investors in the coming months. Fidelity provides investment advice, discount brokerage services, retirement services, and wealth management services to its clients.
Lower expenses, effective fund management, and the ability to survive market volatility have resulted in strong fund performance. Fidelity reported that it had $4.24 trillion worth of assets under management as of Mar 31, 2023, and added 1.6 million new retail accounts over the past 12 months.
Here are a few other broad reasons why building positions in this Boston-based investment giant should be prudent at this juncture. Fidelity invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments are made in technology, one of the best-performing sectors in 2023. In the cyclical sectors, the fund family invests the maximum in the financial sector, which is expected to move up in a higher-rate environment. In the defensives, the fund family's major focus is on the healthcare sector, again a sector on a northward climb in recent weeks.
Investing in these mutual funds may provide the much-required stability and growth potential in a market that is expected to remain volatile for a while. Hence, astute investors should consider such funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected four mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000 as well as carry a low expense ratio.
Fidelity Magellan Fund (FMAGX - Free Report) primarily invests the majority of its net assets in common stocks of domestic and foreign issuers. FMAGX invests both in growth and value stocks, and its advisors use fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions for their investment purposes.
Sammy Simnegar has been the lead manager of FMAGX since February 2019. The three top holdings for FMAGX are 7.1% in Microsoft, 4.1% in Apple and 3% in UnitedHealth Group.
FMAGX’s 3-year and 5-year annualized returns are 10% and 9.5%, respectively, and its net expense ratio is 0.54% compared to the category average of 0.99%. FMAGX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Capital Appreciation Fund (FCAKX - Free Report) invests primarily in common stocks of both domestic and foreign issuers. FCAKX invests both in growth and value stocks, and its advisors use fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions for their investment purposes.
Jason Weiner has been the lead manager of FCAKX since October 2018. The three top holdings for FCAKX are 5.8% in Microsoft, 2.9% in Mastercard, and 2.8% in UnitedHealth Group.
FCAKX’s 3-year and 5-year annualized returns are 14.4% and 11.2%, respectively, and its net expense ratio is 0.75% compared to the category average of 0.99%. FCAKX has a Zacks Mutual Fund Rank #2.
Fidelity Advisor Diversified Stock Fund (FDTIX - Free Report) seeks capital growth and primarily invests its assets in common stocks. FDTIX has the flexibility to invest in domestic or foreign issuers, and in either growth stocks or value stocks, or both.
Daniel E. Kelley has been the lead manager of FDTIX since April 2017. The three top holdings for FDTIX are 5.2% in Microsoft, 3.7% in UnitedHealth Group and 3% in Apple.
FDTIX’s 3-year and 5-year annualized returns are 14.1% and 10.8%, respectively, and its net expense ratio is 0.59% compared to the category average of 0.84%. FDTIX has a Zacks Mutual Fund Rank #1.
Fidelity Stock Selector Small Cap Fund (FDSCX - Free Report) invests primarily in common stocks of both domestic and foreign issuers. FDSCX invests both in growth and value stocks, and in securities of companies with small market capitalization (those with market capitalization similar to companies on the Russell 2000). The fund uses fundamental analysis to select investments.
Jennifer Fo Cardillo has been the lead manager of FDSCX since November 2021. The three top holdings for FDSCX are 1.5% in Atkore, 1.4% in Commercial Metals, and 1.4% in Denbury.
FDSCX’s 3-year and 5-year annualized returns are 16.4% and 8.7%, respectively, and its net expense ratio is 0.93% compared to the category average of 1.03%. FDSCX has a Zacks Mutual Fund Rank #1.
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4 Fidelity Mutual Funds to Bank on in Volatile Markets
Inflation indicators in recent weeks have continued to dampen the mood of investors, staying at an alarmingly high level, with little to no evidence that it is going down anytime soon. It is still way off the Federal Reserve’s target rate of 2%, and even as other economic indicators show some signs of slowing down, a pause in rate hikes seems a distant dream.
The month of May had started with the hope that the 25 bps rate hike announced by the Fed from its latest FOMC meeting might be the last in its series of hikes aimed at combatting inflation, but with inflation numbers coming in hotter-than-expected, we are not so sure now.
The recent crisis in the regional banking sector, which started in March, has also contributed to keeping markets volatile. This has led to risk-off positioning, and trading has been choppy in recent weeks. Investors are rushing to safer waters and parking their money with less-speculative proven performers.
This is precisely why Fidelity Investments, the third-biggest fund family in the United States, with respect to assets under management, is expected to get more traction from investors in the coming months. Fidelity provides investment advice, discount brokerage services, retirement services, and wealth management services to its clients.
Lower expenses, effective fund management, and the ability to survive market volatility have resulted in strong fund performance. Fidelity reported that it had $4.24 trillion worth of assets under management as of Mar 31, 2023, and added 1.6 million new retail accounts over the past 12 months.
Here are a few other broad reasons why building positions in this Boston-based investment giant should be prudent at this juncture. Fidelity invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments are made in technology, one of the best-performing sectors in 2023. In the cyclical sectors, the fund family invests the maximum in the financial sector, which is expected to move up in a higher-rate environment. In the defensives, the fund family's major focus is on the healthcare sector, again a sector on a northward climb in recent weeks.
Investing in these mutual funds may provide the much-required stability and growth potential in a market that is expected to remain volatile for a while. Hence, astute investors should consider such funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected four mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000 as well as carry a low expense ratio.
Fidelity Magellan Fund (FMAGX - Free Report) primarily invests the majority of its net assets in common stocks of domestic and foreign issuers. FMAGX invests both in growth and value stocks, and its advisors use fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions for their investment purposes.
Sammy Simnegar has been the lead manager of FMAGX since February 2019. The three top holdings for FMAGX are 7.1% in Microsoft, 4.1% in Apple and 3% in UnitedHealth Group.
FMAGX’s 3-year and 5-year annualized returns are 10% and 9.5%, respectively, and its net expense ratio is 0.54% compared to the category average of 0.99%. FMAGX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Capital Appreciation Fund (FCAKX - Free Report) invests primarily in common stocks of both domestic and foreign issuers. FCAKX invests both in growth and value stocks, and its advisors use fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions for their investment purposes.
Jason Weiner has been the lead manager of FCAKX since October 2018. The three top holdings for FCAKX are 5.8% in Microsoft, 2.9% in Mastercard, and 2.8% in UnitedHealth Group.
FCAKX’s 3-year and 5-year annualized returns are 14.4% and 11.2%, respectively, and its net expense ratio is 0.75% compared to the category average of 0.99%. FCAKX has a Zacks Mutual Fund Rank #2.
Fidelity Advisor Diversified Stock Fund (FDTIX - Free Report) seeks capital growth and primarily invests its assets in common stocks. FDTIX has the flexibility to invest in domestic or foreign issuers, and in either growth stocks or value stocks, or both.
Daniel E. Kelley has been the lead manager of FDTIX since April 2017. The three top holdings for FDTIX are 5.2% in Microsoft, 3.7% in UnitedHealth Group and 3% in Apple.
FDTIX’s 3-year and 5-year annualized returns are 14.1% and 10.8%, respectively, and its net expense ratio is 0.59% compared to the category average of 0.84%. FDTIX has a Zacks Mutual Fund Rank #1.
Fidelity Stock Selector Small Cap Fund (FDSCX - Free Report) invests primarily in common stocks of both domestic and foreign issuers. FDSCX invests both in growth and value stocks, and in securities of companies with small market capitalization (those with market capitalization similar to companies on the Russell 2000). The fund uses fundamental analysis to select investments.
Jennifer Fo Cardillo has been the lead manager of FDSCX since November 2021. The three top holdings for FDSCX are 1.5% in Atkore, 1.4% in Commercial Metals, and 1.4% in Denbury.
FDSCX’s 3-year and 5-year annualized returns are 16.4% and 8.7%, respectively, and its net expense ratio is 0.93% compared to the category average of 1.03%. FDSCX has a Zacks Mutual Fund Rank #1.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>