There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is Fidelity Advisor New Insights A (FNIAX). FNIAX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FNIAX. Fidelity Advisor New Insights A debuted in July of 2003. Since then, FNIAX has accumulated assets of about $6.16 billion, according to the most recently available information. The fund’s current manager, William Danoff, has been in charge of the fund since July of 2003.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 11.08%, and it sits in the bottom 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 11.26%, 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. Compared to the category average of 16.36%, the standard deviation of FNIAX over the past three years is 19.65%. Looking at the past 5 years, the fund’s standard deviation is 17.86% compared to the category average of 14.39%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 1.05, 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 negative alpha of -2.38. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 80.38% stock in stocks, with an average market capitalization of $550.87 billion. The fund has the heaviest exposure to the following market sectors:
This fund’s turnover is about 29%, so the fund managers are making fewer trades than its comparable peers.
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, FNIAX is a load fund. It has an expense ratio of 0.93% compared to the category average of 0.99%. FNIAX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Overall, Fidelity Advisor New Insights A ( FNIAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
For additional information on the Mutual Fund Equity Report 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 FNIAX too 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.