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Is Fidelity Trend Fund (FTRNX) a Strong Mutual Fund Pick Right Now?

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Global - Equity fund seekers should consider taking a look at Fidelity Trend Fund (FTRNX - Free Report) . FTRNX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that FTRNX is a Global - Equity option, an investment area loaded with different options. While Global - Equity mutual funds invest their assets in large markets-think the U.S., Europe, and Japan-they aren't limited by geography. Their investment technique is one that leverages the global economy in order to offer stable returns.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FTRNX. Fidelity Trend Fund debuted in December of 1961. Since then, FTRNX has accumulated assets of about $4.33 billion, according to the most recently available information. Shilpa Mehra is the fund's current manager and has held that role since August of 2018.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 15.28%, 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 28.42%, which places it in the top 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. FTRNX's standard deviation over the past three years is 20.81% compared to the category average of 19.92%. Looking at the past 5 years, the fund's standard deviation is 21.97% compared to the category average of 20.13%. 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 1.28, 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 negative alpha over the past 5 years of -1.73, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining 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 principally on equities that are traded in the United States.

Right now, 76.89% of this mutual fund's holdings are stocks, which have an average market capitalization of $609.04 billion. The fund has the heaviest exposure to the following market sectors:

  • Technology
  • Retail Trade

Turnover is about 67%, so those in charge of the fund make more trades in a given year than the category average.

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, FTRNX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 0.93%. FTRNX is actually cheaper than its peers when you consider factors like cost.

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, Fidelity Trend Fund ( FTRNX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on FTRNX in the Global - Equity category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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