If you’ve been stuck searching for Large Cap Value funds, consider Fidelity Equity-Income Fund (FEQIX) as a possibility. FEQIX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
FEQIX is a part of the Fidelity family of funds, a company based out of Boston, MA. Since Fidelity Equity-Income Fund made its debut in May of 1966, FEQIX has garnered more than $6.57 billion in assets. The fund is currently managed by Ramona Persaud who has been in charge of the fund since October of 2011.
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 12.24%, and it sits in the top third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3-year annualized total return of 12.61%, 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. FEQIX’s standard deviation over the past three years is 17.52% compared to the category average of 17.49%. Looking at the past 5 years, the fund’s standard deviation is 14.44% compared to the category average of 14.55%. This makes the fund less volatile than its peers over the past half-decade.
The fund has a 5-year beta of 0.93, so investors should note that it is hypothetically less 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 -2.52. 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 mostly on equities that are traded in the United States.
The mutual fund currently has 81.97% of its holdings in stocks, with an average market capitalization of $159.39 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 50%, which means this fund makes fewer trades than its comparable peers.
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, FEQIX is a no load fund. It has an expense ratio of 0.59% compared to the category average of 1%. So, FEQIX 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.
Overall, Fidelity Equity-Income Fund ( FEQIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Equity-Income Fund ( FEQIX ) looks like a good potential choice for investors right now.
Don’t stop here for your research on Large Cap Value 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 FEQIX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.