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

If you have been looking for Large Cap Growth funds, a place to start could be Fidelity Growth Company K (FGCKX). FGCKX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various 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 based in Boston, MA, and is the manager of FGCKX. Fidelity Growth Company K debuted in May of 2008. Since then, FGCKX has accumulated assets of about $7.78 billion, according to the most recently available information. Steven S. Wymer is the fund's current manager and has held that role since May of 2008.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 14.95%, 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 32.72%, which places it in the top 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. FGCKX's standard deviation over the past three years is 16.48% compared to the category average of 13.03%. The standard deviation of the fund over the past 5 years is 20.53% compared to the category average of 15.81%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.22, 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. The fund has produced a negative alpha over the past 5 years of -0.87, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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.

As of the last filing date, the mutual fund has 87.51% of its assets in stocks, with an average market capitalization of $678.30 billion. The fund has the heaviest exposure to the following market sectors:

• Technology
• Retail Trade

Turnover is 16%, which means, on average, the fund makes fewer trades than the average comparable fund.

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, FGCKX is a no load fund. It has an expense ratio of 0.62% compared to the category average of 0.93%. Looking at the fund from a cost perspective, FGCKX 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.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Growth Company K ( FGCKX ) 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 ( FGCKX ) looks like a good potential choice for investors right now.

This could just be the start of your research on FGCKX in the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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.

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This article originally published on Zacks Investment Research (zacks.com).

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