Having trouble finding a Large Cap Blend fund? Fidelity 500 Index Institutional is a potential starting point. FXSIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
FXSIX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a “buy and hold" mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
FXSIX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity 500 Index Institutional debuted in May of 2011. Since then, FXSIX has accumulated assets of about $149.7 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Of course, investors look for strong performance in funds. FXSIX has a 5-year annualized total return of 14.79% and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 11.50%, which places it in the top 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. The standard deviation of FXSIX over the past three years is 10.13% compared to the category average of 9.08%. The fund's standard deviation over the past 5 years is 9.53% compared to the category average of 9.9%. This makes the fund less volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment.
Investors should note that the fund has a 5-year beta of 1, so it is likely going to be as volatile as 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. With a negative alpha of -0.02, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 mostly on equities that are traded in the United States.
The mutual fund currently has 79.37% of its holdings in stocks, with an average market capitalization of $178.23 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FXSIX is a no load fund. It has an expense ratio of 0.03% compared to the category average of 1%. FXSIX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $5 million; each subsequent investment has no minimum amount.
Overall, Fidelity 500 Index Institutional has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity 500 Index Institutional looks like a good potential choice for investors right now.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FXSIX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.