On the lookout for a Large Cap Value fund? Starting with Fidelity Large Cap Value Enhance Index (FLVEX - Free Report) is one possibility. FLVEX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FLVEX. Fidelity Large Cap Value Enhance Index debuted in May of 2007. Since then, FLVEX has accumulated assets of about $3.62 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. FLVEX has a 5-year annualized total return of 11.7% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.59%, 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. Over the past three years, FLVEX's standard deviation comes in at 10.51%, compared to the category average of 10.71%. The fund's standard deviation over the past 5 years is 10.19% compared to the category average of 10.28%. This makes the fund less volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, FLVEX lost 52.98% and underperformed comparable funds by 2.74%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FLVEX has a 5-year beta of 0.98, which means it is likely to be as volatile as the market average. 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. FLVEX's 5-year performance has produced a negative alpha of -1.18, which means 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 primarily on equities that are traded in the United States.
This fund is currently holding about 92.78% stock in stocks, which have an average market capitalization of $119.04 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 93%, this fund makes more trades in a given year than the category average.
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, FLVEX is a no load fund. It has an expense ratio of 0.40% compared to the category average of 1.03%. From a cost perspective, FLVEX is actually cheaper than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.
Overall, Fidelity Large Cap Value Enhance Index has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Large Cap Value Enhance Index looks like a good potential choice for investors right now.
Don't stop here for your research on Large Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FLVEX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.