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Is Fidelity Growth Company K (FGCKX) a Strong Mutual Fund Pick Right Now?

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Having trouble finding a Large Cap Growth fund? Fidelity Growth Company K (FGCKX - Free Report) is a potential starting point. FGCKX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FGCKX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

History of Fund/Manager

Fidelity is responsible for FGCKX, and the company is based out of Boston, MA. The Fidelity Growth Company K made its debut in May of 2008 and FGCKX has managed to accumulate roughly $17.27 billion in assets, as of the most recently available information. Steven S. Wymer is the fund's current manager and has held that role since May of 2008.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 20.67%, 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 16.78%, 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. Compared to the category average of 10.23%, the standard deviation of FGCKX over the past three years is 13.83%. The standard deviation of the fund over the past 5 years is 12.92% compared to the category average of 9.98%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

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 1.15, 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. Over the past 5 years, the fund has a positive alpha of 3.43. This means that managers in this portfolio are skilled in picking 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 primarily on equities that are traded in the United States.

As of the last filing date, the mutual fund has 94.63% of its assets in stocks, with an average market capitalization of $220.94 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Health
  3. Retail Trade

This fund's turnover is about 15%, so the fund managers are making 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, FGCKX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.12%. So, FGCKX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Growth Company K has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Growth Company K looks like a good potential choice for investors right now.

Want even more information about FGCKX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.




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