Fidelity Wins Big Among Large Funds

BOSTON (TheStreet) -- Fidelity Investments is dominating the list of this year's biggest and best-performing mutual funds in the U.S.

Boston-based Fidelity, which has $1.3 trillion in mutual fund assets under management, nailed down the top two spots and five of the top 10, according to data from research firm Morningstar.

Mutual funds that invest in large companies with above-average earnings growth have shined this year, tripling the return of the benchmark S&P 500 Index. That may help to silence critics who say some of Fidelity's funds hew too closely to their stated benchmarks, also known pejoratively as closet indexing.

The Fidelity Growth Company Fund(FDGRX) led the way with a 16% gain. Given its $35 billion in assets and 301 holdings, manager Steven Wymer is putting in a brilliant performance.

In a league of his own is Fidelity manager William Danoff, who, by dint of running the Fidelity Contrafund(FCNTX) and Fidelity Advisor New Insights Fund(FNIAX), is responsible for the oversight of $85 billion. Both funds have risen about 13%.

Danoff started his 21st year as manager of Contrafund. During his tenure, the fund has had a 12.8% annualized return, versus the 8.8% increase of the S&P 500, according to Morningstar.

James Lowell, editor of the independent Fidelity Investor Newsletter, said this year's difficult-to-define investing environment is just right for Fidelity's managers given their experience, stock-picking acumen and support team of analysts. "They've been head and shoulders above their peers," he said.

Another factor is that Fidelity gives its managers a great degree of independence and the latitude to wander from their funds' style box. If they see long-term growth opportunities in small- and mid-cap stocks, they can buy them and not have to worry about selling their ideas to a committee, as is common practice elsewhere.

The funds owe a debt of gratitude to iPad and iPhone maker Apple(AAPL), as its appears in the top two holdings of each. Its 52% gain so far this year provides a generous cushion for their returns.

This article's rankings are based on data provided by Morningstar and includes the 50 largest mutual funds that are the best performers in the large-capitalization growth, value or blend (growth and value) categories, with less than 30% of assets in small- or mid-cap stocks. Industry- and country-specific funds are excluded.

In inverse order, here are the 10 best-performing funds, their key holdings and strategy: