Investors in search of a Large Cap Value fund might want to consider looking at Fidelity Large Cap Value Enhance Index (FLVEX). FLVEX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
FLVEX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream fund these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds’high growth opportunity are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.
History of Fund/Manager
Fidelity is responsible for FLVEX, and the company is based out of Boston, MA. Fidelity Large Cap Value Enhance Index debuted in May of 2007. Since then, FLVEX has accumulated assets of about $4.88 billion, according to the most recently available information. The fund’s current manager is a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.73%, and it sits 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 8.72%, which places it in the bottom 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. FLVEX’s standard deviation over the past three years is 19.5% compared to the category average of 16.77%. Over the past 5 years, the standard deviation of the fund is 16.08% compared to the category average of 14.11%. 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 1.02, so it is likely going to be as volatile as 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 negative alpha of -3.66. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 principally on equities that are traded in the United States.
Right now, 96.42% of this mutual fund’s holdings are stocks, and these companies have an average market capitalization of $128.03 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is about 81%, so those in charge of the fund make more trades in a given year than the average of comparable funds.
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, FLVEX is a no load fund. It has an expense ratio of 0.39% compared to the category average of 1%. So, FLVEX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
This could just be the start of your research on FLVEXin the Large Cap Value 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. Zacks provides a full suite of tools to help you analyze your portfolio – both funds and stocks – in the most efficient way possible.
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