Yahoo Finance Is Fidelity 500 Index Premium (FUSVX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Blend fund could think about starting with Fidelity 500 Index Premium Fund FUSVX. FUSVX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FUSVX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FUSVX. The Fidelity 500 Index Premium made its debut in October of 2005 and FUSVX has managed to accumulate roughly $72.15 billion in assets, as of the most recently available information. The fund's current manager, a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 15.13%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.74%, 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. FUSVX's standard deviation over the past three years is 10.05% compared to the category average of 9.12%. Over the past 5 years, the standard deviation of the fund is 9.46% compared to the category average of 9.86%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
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, FUSVX lost 50.96% and underperformed its peer group by 1.39%. This might suggest that the fund is a worse choice than its peers during a bear market.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. In its worst calendar year in a decade, the fund lost over 37.01%.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FUSVX has a 5-year beta of 1, which means it is likely to be as volatile as the market average. 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. The fund has produced a negative alpha over the past 5 years of -0.03, which shows that managers in this portfolio find it difficult to pick 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 99.68% of its assets in stocks, with an average market capitalization of $178.23 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Non-Durable
Industrial Cyclical
Expenses
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, FUSVX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 1.03%. So, FUSVX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $10,000; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity 500 Index Premium FUSVX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity 500 Index Premium FUSVX looks like a good potential choice for investors right now.
Your research on the Large Cap Blend segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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