If you have been looking for Large Cap Blend funds, a place to start could be Fidelity 500 Index Institutional . FXSIX carries 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
Fidelity is based in Boston, MA, and is the manager of FXSIX. Fidelity 500 Index Institutional made its debut in May of 2011, and since then, FXSIX has accumulated about $33.81 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 15.88%, and it sits 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 14.63%, 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 9.16%. Looking at the past 5 years, the fund's standard deviation is 9.53% compared to the category average of 8.88%. This makes the fund more volatile than its peers over the past half-decade.
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1, which means it is hypothetically 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. FXSIX has generated a negative alpha over the past five years of -0.02, demonstrating that 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 79.37% stock in stocks, which have an average market capitalization of $178.23 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
Turnover is 5%, which means, on average, the fund makes fewer trades than the average comparable fund.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FXSIX is a no load fund. It has an expense ratio of 0.03% compared to the category average of 1.07%. So, FXSIX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $5 million, while there is no minimum for each subsequent investment.
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.
This could just be the start of your research on FXSIX in the Large Cap Blend 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.