There are plenty of choices in the Mid Cap Value category, but where should you start your research? Well, one fund that may not be worth investigating is Fidelity Low-Priced Stock K (FLPKX - Free Report) . FLPKX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
We classify FLPKX in the Mid Cap Value category, an area rife with potential choices. Mid Cap Value mutual funds aim to target medium-sized companies that possess strong value and income opportunities for investors. A mid-cap company usually holds a market capitalization of between $2 billion and $10 billion.
History of Fund/Manager
FLPKX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Low-Priced Stock K debuted in May of 2008. Since then, FLPKX has accumulated assets of about $5.41 billion, according to the most recently available information. The fund is currently managed by Joel Tillinghast who has been in charge of the fund since May of 2008.
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 6.59%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.73%, 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. Looking at the past 5 years, the fund's standard deviation is 10.87% compared to the category average of 1.15%. 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.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FLPKX has a 5-year beta of 0.84, which means it is likely to be less volatile than 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. FLPKX's 5-year performance has produced a negative alpha of -2.36, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, FLPKX is a no load fund and it has an expense ratio of 0.43%.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
As a mutual fund with a 'sell' rank, FLPKX is in the bottom 40% of all funds we cover and it may be one to avoid putting on your short list of possible picks in Mid Cap Value. This fund from Fidelity needs to turn around some of its key fundamental metrics such as the Zacks Ranks of its holdings, alpha, and performance in order for investors to consider Fidelity Low-Priced Stock K in the future.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Value, make sure to go to www.zacks.com/funds/mutual-funds 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.