Is Fidelity OTC Portfolio (FOCPX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Large Cap Growth funds, a place to start could be Fidelity OTC Portfolio (FOCPX). FOCPX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FOCPX 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 based in Boston, MA, and is the manager of FOCPX. Since Fidelity OTC Portfolio made its debut in December of 1984, FOCPX has garnered more than $15.68 billion in assets. The fund's current manager, Christopher Lin, has been in charge of the fund since September of 2017.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 18.25%, and is 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 19.63%, 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. Compared to the category average of 16.07%, the standard deviation of FOCPX over the past three years is 19.37%. The standard deviation of the fund over the past 5 years is 18.48% compared to the category average of 14.26%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.12, so investors should note that it is hypothetically more 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. Over the past 5 years, the fund has a positive alpha of 6.13. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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 mostly on equities that are traded in the United States.
This fund is currently holding about 98.79% stock in stocks, and these companies have an average market capitalization of $531.73 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Turnover is 20%, which means this fund makes fewer trades than comparable funds.
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, FOCPX is a no load fund. It has an expense ratio of 0.89% compared to the category average of 1.05%. From a cost perspective, FOCPX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity OTC Portfolio ( FOCPX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity OTC Portfolio ( FOCPX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FOCPX to its peers as well 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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