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Is Fidelity Contrafund (FCNTX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Contrafund (FCNTX - Free Report) . FCNTX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FCNTX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
FCNTX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Contrafund debuted in May of 1967. Since then, FCNTX has accumulated assets of about $95.45 billion, according to the most recently available information. William Danoff is the fund's current manager and has held that role since September of 1990.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.54%, and is 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 17.82%, which places it in the middle 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, FCNTX's standard deviation comes in at 13.76%, compared to the category average of 11.39%. Looking at the past 5 years, the fund's standard deviation is 12.81% compared to the category average of 11.36%. 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. In FCNTX's case, the fund lost 46.34% in the most recent bear market and outperformed its peer group by 3%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.99, the fund is likely to be as volatile as the market average. 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. FCNTX's 5-year performance has produced a positive alpha of 1.84, which means 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 96.32% of its assets in stocks, and these companies have an average market capitalization of $260.65 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
Turnover is about 32%, so those in charge of the fund make fewer trades than its comparable peers.
Expenses
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, FCNTX is a no load fund. It has an expense ratio of 0.81% compared to the category average of 1.05%. From a cost perspective, FCNTX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Contrafund ( FCNTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Contrafund ( FCNTX ) looks like a good potential choice for investors right now.
For additional information on the Large Cap Growth 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 FCNTX too 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.
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Is Fidelity Contrafund (FCNTX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Contrafund (FCNTX - Free Report) . FCNTX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FCNTX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
FCNTX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Contrafund debuted in May of 1967. Since then, FCNTX has accumulated assets of about $95.45 billion, according to the most recently available information. William Danoff is the fund's current manager and has held that role since September of 1990.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.54%, and is 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 17.82%, which places it in the middle 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, FCNTX's standard deviation comes in at 13.76%, compared to the category average of 11.39%. Looking at the past 5 years, the fund's standard deviation is 12.81% compared to the category average of 11.36%. 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. In FCNTX's case, the fund lost 46.34% in the most recent bear market and outperformed its peer group by 3%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.99, the fund is likely to be as volatile as the market average. 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. FCNTX's 5-year performance has produced a positive alpha of 1.84, which means 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 96.32% of its assets in stocks, and these companies have an average market capitalization of $260.65 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Retail Trade
Turnover is about 32%, so those in charge of the fund make fewer trades than its comparable peers.Expenses
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, FCNTX is a no load fund. It has an expense ratio of 0.81% compared to the category average of 1.05%. From a cost perspective, FCNTX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Contrafund ( FCNTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Contrafund ( FCNTX ) looks like a good potential choice for investors right now.
For additional information on the Large Cap Growth 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 FCNTX too 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.