We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Fidelity Small Cap Discovery Fund (FSCRX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
If you've been stuck searching for Small Cap Growth funds, you might want to consider passing on by Fidelity Small Cap Discovery Fund (FSCRX - Free Report) as a possibility. FSCRX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as FSCRX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.
History of Fund/Manager
Fidelity is responsible for FSCRX, and the company is based out of Boston, MA. Fidelity Small Cap Discovery Fund debuted in January of 2001. Since then, FSCRX has accumulated assets of about $2.43 billion, according to the most recently available information. The fund's current manager, Forrest St. Clair, has been in charge of the fund since March of 2023.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FSCRX has a 5-year annualized total return of 12.96%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 10.58%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 FSCRX over the past three years is 20.23% compared to the category average of 21.75%. Over the past 5 years, the standard deviation of the fund is 20.16% compared to the category average of 20.56%. This makes the fund less 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, so it is likely going to be more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. FSCRX's 5-year performance has produced a negative alpha of -1.89, which means 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 largely on equities that are traded in the United States.
Right now, 94.5% of this mutual fund's holdings are stocks, which have an average market capitalization of $5.39 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
Retail Trade
Other
Turnover is about 80%, so those in charge of the fund make fewer trades than comparable funds.
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, FSCRX is a no load fund. It has an expense ratio of 1.09% compared to the category average of 1.01%. So, FSCRX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively strong performance, average downside risk, and higher fees, Fidelity Small Cap Discovery Fund ( FSCRX ) has a low Zacks Mutual Fund rank, and therefore looks a poor potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Small Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Fidelity Small Cap Discovery Fund (FSCRX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Small Cap Growth funds, you might want to consider passing on by Fidelity Small Cap Discovery Fund (FSCRX - Free Report) as a possibility. FSCRX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as FSCRX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.
History of Fund/Manager
Fidelity is responsible for FSCRX, and the company is based out of Boston, MA. Fidelity Small Cap Discovery Fund debuted in January of 2001. Since then, FSCRX has accumulated assets of about $2.43 billion, according to the most recently available information. The fund's current manager, Forrest St. Clair, has been in charge of the fund since March of 2023.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FSCRX has a 5-year annualized total return of 12.96%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 10.58%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 FSCRX over the past three years is 20.23% compared to the category average of 21.75%. Over the past 5 years, the standard deviation of the fund is 20.16% compared to the category average of 20.56%. This makes the fund less 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, so it is likely going to be more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. FSCRX's 5-year performance has produced a negative alpha of -1.89, which means 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 largely on equities that are traded in the United States.
Right now, 94.5% of this mutual fund's holdings are stocks, which have an average market capitalization of $5.39 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is about 80%, so those in charge of the fund make fewer trades than comparable funds.
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, FSCRX is a no load fund. It has an expense ratio of 1.09% compared to the category average of 1.01%. So, FSCRX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively strong performance, average downside risk, and higher fees, Fidelity Small Cap Discovery Fund ( FSCRX ) has a low Zacks Mutual Fund rank, and therefore looks a poor potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Small Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.