Mid Cap Blend fund seekers should consider taking a look at Fidelity Mid-Cap Stock Fund (FMCSX). FMCSX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
FMCSX is one of many funds to choose from. Because Mid Cap Blend mutual funds typically feature a portfolio filled with stocks of various sizes and styles, it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. Mid-cap blends, while offering exciting growth potential, income opportunities, and value picks, offer some stability as well.
FMCSX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Mid-Cap Stock Fund debuted in March of 1994. Since then, FMCSX has accumulated assets of about $6.10 billion, according to the most recently available information. The fund is currently managed by Nicola Stafford who has been in charge of the fund since July of 2017.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 14.61%, 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 5.84%, which places it in the middle third during this time-frame.
It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
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. FMCSX’s standard deviation over the past three years is 18.34% compared to the category average of 16.64%. Looking at the past 5 years, the fund’s standard deviation is 17.39% compared to the category average of 15.99%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.92, which means it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. FMCSX has generated a positive alpha over the past five years of 0.3, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Exploring 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.
Currently, this mutual fund is holding 77.61% in stocks, with an average market capitalization of $16.19 billion. The fund has the heaviest exposure to the following market sectors:
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Finance
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Industrial Cyclical
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Technology
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Other
Turnover is 27%, which means, on average, the fund makes fewer trades than the average comparable fund.
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, FMCSX is a no load fund. It has an expense ratio of 0.69% compared to the category average of 0.92%. FMCSX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Overall, Fidelity Mid-Cap Stock Fund ( FMCSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
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This article originally published on Zacks Investment Research (zacks.com).