Mutual Fund Equity Report fund seekers should consider taking a look at Fidelity Advisor New Insights A (FNIAX). FNIAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
FNIAX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Advisor New Insights A made its debut in July of 2003, and since then, FNIAX has accumulated about $5.65 billion in assets, per the most up-to-date date available. The fund’s current manager, William Danoff, has been in charge of the fund since July of 2003.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 8.31%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.26%, which places it in the middle 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. Over the past three years, FNIAX’s standard deviation comes in at 18.94%, compared to the category average of 18.51%. The standard deviation of the fund over the past 5 years is 19.56% compared to the category average of 16.31%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.02, so investors should note that it is hypothetically 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. FNIAX has generated a negative alpha over the past five years of -2.41, demonstrating 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 85.12% of its assets in stocks and it has 10.42% of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:
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Technology
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Finance
This fund’s turnover is about 32%, so the fund managers are making fewer trades than its comparable peers.
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, FNIAX is a load fund. It has an expense ratio of 0.70% compared to the category average of 0.99%. Looking at the fund from a cost perspective, FNIAX 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 Advisor New Insights A ( FNIAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
Your research on the Mutual Fund Equity Report 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. 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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