When it comes to investment managers, few have the breadth of products that Fidelity does. The issuer offers more 450 different mutual funds — if you include multiple shares classes. And investors have placed over $5 trillion with the manager through its various strategies.
Increasingly, those Fidelity funds have skewed towards passive and indexed solutions. The manager’s recent suite of index ETFs is a testament to that shift. Investors have flocked in spades to funds like its Fidelity Core Dividend ETF (NYSEARCA:FDVV).
But investors shouldn’t count out Fidelity’s actively managed mutual funds and products. Many feature low costs, great managers and, ultimately, market-beating returns. So while passive is ruling the roost at Fidelity, active is still alive and well.
With that in mind, here are three actively managed Fidelity funds to buy today.
Actively Managed Fidelity Funds to Buy: Fidelity Focused Stock Fund (FTQGX)
Expense Ratio: 0.62%, or $62 per $10,000 annually
The whole point of using active management is that you’re paying for the managers to make real investment decisions. And that’s the focus at the Fidelity Focused Stock Fund (MUTF:FTQGX).
Stephen M. DuFour hones in on opportunities in the U.S. He has the ability to bet on any market-cap, large to small, as well as multiple styles. You’re just as likely to find “growth” names in FTQGX as your “value” stocks. Top holdings currently include Norfolk Southern Corp. (NYSE:NSC) and Bank of America Corp (NYSE:BAC).
The key is that DuFour will only hold 30 to 80 stocks in total. Most mutual funds suffer from asset bloat and end up looking like closeted index funds. High conviction funds — like FTQSX — typically can outperform, as their concentrated portfolios allow for individual stocks to shine.
And FTQGX has shined brightly.
Over the last 10 years, FTQGX has managed to return 8.38% annually. That bests the S&P 500 by more than a percentage point a year. Clearly, this is an instance when paying for active management makes sense, but at just 0.62% in expenses — or $62 per $10,000 invested — FTQGX is a pretty cheap option anyway. That makes it one of the best Fidelity funds to own.
Actively Managed Fidelity Funds to Buy: Fidelity New Millennium Fund (FMILX)
Expense Ratio: 0.54%
As Bob Dylan says — “The times they are a-changing.” Which is why investors may want to consider the Fidelity New Millennium Fund (MUTF:FMILX).
FMLIX’s mandate is to bet on those firms that are directly trying to profit from economic disruption. This can include technological advances, product innovation and changes in demographics, social attitudes and other factors. Basically, if the world is changing and a firm is ready to capitalize on that change, this Fidelity fund will pounce.
And while managers of FMLIX have the ability to bet on large-cap stocks — Cisco Systems, Inc. (NASDAQ:CSCO) is a top holding — the bulk of the portfolio is faster-growing small- and mid-caps. Additionally, the fund does have a slightly “growth stock” tilt. This focus on disruption, smaller stocks and growth has allowed FMILX to be one of the better active Fidelity funds out there.
Returns for the mutual fund have bested the S&P 500 over the last ten years. However, the recent shift from “growth” back to “value” has hurt near-term returns. But giving the long-term focus on change, this should just be a hiccup on FMLIX’s path to greatness.
Expenses for actively managed Fidelity fund run 0.54%.
Actively Managed Fidelity Funds to Buy: Fidelity Puritan (FPURX)
Expense Ratio: 0.56%
Balanced funds are a great all-in-one option for investors looking for one-ticker access. They own both stocks and bonds — usually at 60/40 split. And most of the time they are indexed.
But Fidelity Puritan Fund (MUTF:FPURX) is a different animal. Sure, it has both stocks and bonds. But that’s where the similarities end.
As an active managed balanced fund, FPURX can and does shift that allocation of stocks and bonds according to market conditions and can have 80/20 split if warranted. Additionally, the fund’s managers are allowed to hunt for values rather than be tied to an index. That includes finding low-priced equity gems or beaten down high yield bonds. As a result, FPURX is a very different balanced fund than what most investors are used to.
And it has performed better as well.
FPURX has less risk and smaller drawdowns than the S&P 500. That was made known in 2008, when Puritan lost less money the benchmark stock index and rebounded better during the subsequent year. No wonder why Puritan has a four-star rating and is one of the top actively managed Fidelity funds.
Expenses cost just 0.56%.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.