Is Fidelity Focused Stock Fund (FTQGX) 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 you should consider investigating is Fidelity Focused Stock Fund (FTQGX). FTQGX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FTQGX 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

Fidelity is responsible for FTQGX, and the company is based out of Boston, MA. Fidelity Focused Stock Fund made its debut in November of 1996, and since then, FTQGX has accumulated about $2.90 billion in assets, per the most up-to-date date available. Stephen DuFour is the fund's current manager and has held that role since March of 2007.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 12.43%, and is in the middle 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 20.54%, 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. FTQGX's standard deviation over the past three years is 13.79% compared to the category average of 13.89%. The standard deviation of the fund over the past 5 years is 13.35% compared to the category average of 13.46%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In FTQGX's case, the fund lost 45.71% 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 1, the fund 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 positive alpha over the past 5 years of 1.51, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

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, FTQGX is a no load fund. It has an expense ratio of 0.89% compared to the category average of 1.08%. FTQGX is actually cheaper than its peers when you consider factors like cost.

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 Focused Stock Fund ( FTQGX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average 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 FTQGX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

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