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) - Get Fidelity Growth Company Report
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) - Get Fidelity Contrafund Report
and
Fidelity Advisor New Insights Fund
(FNIAX) - Get Fidelity Adv New Insights A Report
, is responsible for the oversight of $85 billion. Both funds have risen about 13%.
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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) - Get Apple Inc. Report
, 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:
10.
VANGUARD GROWTH INDEX FUND
(VIGRX) - Get Vanguard Growth Index Inv Report
RETURN
: 15%
ASSETS
: $18 billion
MANAGER
: Gerard O'Reilly, since 2005
TOP STOCKS
:
Apple
(AAPL) - Get Apple Inc. Report
, 4.5%,
Microsoft
(MSFT) - Get Microsoft Corporation Report
, 3.6%, and
IBM
(IBM) - Get International Business Machines Corporation Report
, 3.2%
BIG WINNER
:
Cummins
(CMI) - Get Cummins Inc. Report
, up 129% this year.
STRATEGY
: This passively managed growth index fund is benchmarked to the MSCI U.S. Prime Market Growth Index, a broadly diversified index of growth stocks predominantly made up of large U.S. companies. The top 10 stocks account for 26% of the fund.
Also among its largest holdings are
Cisco
(CSCO) - Get Cisco Systems, Inc. Report
, 2.4% of the fund, and
Wal-Mart
(WMT) - Get Walmart Inc. Report
, at 2.2%. Among the big winners are engine maker
Cummins
and
Akamai Technologies
(AKAM) - Get Akamai Technologies, Inc. Report
, up 113%.
9.
FIDELITY DIVIDEND GROWTH FUND
(FDGFX) - Get Fidelity Dividend Growth Report
RETURN
: 12%
ASSETS
: $8.9 billion
MANAGER
: Lawrence Rakers, since September 2008
TOP STOCKS
:
Apple
(AAPL) - Get Apple Inc. Report
, 2.5%,
Wells Fargo
(WFC) - Get Wells Fargo & Company Report
, 1.6%, and
JPMorgan Chase
(JPM) - Get JPMorgan Chase & Co. Report
, 1.5%.
BIG WINNER
:
Apple
(AAPL) - Get Apple Inc. Report
, up 51%.
STRATEGY
: This fund holds a broadly diverse portfolio spread across 538 stocks, with only 14% of its assets invested in the top 10. That helps protect performance in the event of a broad downside move by the market. It lost 43% in 2008 and gained 51% in 2009.
Among its winners are
Union Pacific
(UNP) - Get Union Pacific Corporation Report
, up 49%,
CB Richard Ellis
(CBG)
, up 47%, and
National Oilwell Varco
, up 43%.
8.
FIDELITY ADVISOR NEW INSIGHTS
(FNIAX) - Get Fidelity Adv New Insights A Report
RETURN
: 13%
ASSETS
: $14 billion
MANAGER
: William Danoff, since July 2003
TOP STOCKS
: Cash, 7.3%,
Apple
(AAPL) - Get Apple Inc. Report
, 6.8%, and
(GOOG) - Get Alphabet Inc. Class C Report
, 5.3%
BIG WINNER
:
Chipotle Mexican Grille
(CMG) - Get Chipotle Mexican Grill, Inc. Report
, up 174%.
STRATEGY
: The fund has a wide and shallow portfolio, as it includes 514 stocks, and the top 10 holdings make up only 28% of assts.
Berkshire Hathaway
(BRK.A) - Get Berkshire Hathaway Inc. Class A Report
is the fourth-largest position, at 3% of the fund.
The fund declined 38% in 2008, followed by a 29% gain in 2009. The fast-growing fast-food chain
Chipotle Mexican Grille
, with a market value of only $7.3 billion, may seem like an odd pick, but this is indicative of the freedom given to Fidelity managers.
7.
T. ROWE PRICE BLUE CHIP GROWTH
(TRBCX) - Get T. Rowe Price Blue Chip Growth Fd Report
RETURN
: 13%
ASSETS
: $11 billion
MANAGER
: Larry Puglia, since June 1993
TOP STOCKS
:
Apple
(AAPL) - Get Apple Inc. Report
, 7.6%,
(GOOG) - Get Alphabet Inc. Class C Report
, 5.4%, and
Amazon
(AMZN) - Get Amazon.com, Inc. Report
, 4.7%
BIG WINNER
:
Baidu
(BIDU) - Get Baidu Inc. Report
, up 163%.
STRATEGY
: The portfolio is made up of 133 stocks, with a third of assets in the top 10 stocks. Consumer services is the largest sector weighting. The top 25 stocks are a white-bread mix of blue-chip, steadily-growing companies that tend to be their industry's leader.
Even
Baidu
(BIDU) - Get Baidu Inc. Report
, the leading Internet search provider in China, is not out of the mold of the rest of the portfolio.
6.
VANGUARD MORGAN GROWTH INVESTORS
(VMRGX)
RETURN
: 13%
ASSETS
: $8.3 billion
MANAGER
: James Stetler, since 2003; Paul Marrkand, 2005; Kathleen McCarragher, 2007; Ford Draper Jr. and Stephen Knightley, 2008
TOP STOCKS
:
Apple
(AAPL) - Get Apple Inc. Report
, 3.6%,
IBM
(IBM) - Get International Business Machines Corporation Report
, 3%, and
Cisco
(CSCO) - Get Cisco Systems, Inc. Report
, 2.7%
BIG WINNER
:
Altera
(ALTR) - Get Altair Engineering Inc. Class A Report
, up 66%.
STRATEGY
: Run under a team concept, each manager brings an area of expertise. The fund holds a whopping 321 stocks, with a mere 23% of its assets in the top 10 stocks, which means its assets are spread thinly over a diverse portfolio. Computer hardware is the largest sector weighting at 26%, followed by industrial materials, 13%.
The big winners are
Altera
(ALTR) - Get Altair Engineering Inc. Class A Report
, a manufacturer of programmable chips,
Caterpillar
(CAT) - Get Caterpillar Inc. Report
, the construction-machinery maker, and
Apple
, of course.
5.
T.ROWE PRICE GROWTH STOCK
(PRGFX) - Get T. Rowe Price Growth Stock Fd Report
RETURN
: 13%
ASSETS
: $24 billion
MANAGER
: Robert Bartolo, since October 2007
TOP STOCKS
:
Apple
(AAPL) - Get Apple Inc. Report
, 7.3%,
(GOOG) - Get Alphabet Inc. Class C Report
, 5.1%, and
Amazon
(AMZN) - Get Amazon.com, Inc. Report
, 4%
BIG WINNER
:
Coach
(COH)
, up 55%.
STRATEGY
: The fund holds 105 stocks, and a third of its assets are in the top 10 holdings. Its turnover is 59%. The biggest sector weighting is telecommunications, at 16%, followed by consumer services, at 15.3%. Along with
Baidu
(BIDU) - Get Baidu Inc. Report
, the China Internet search engine, and
Apple
, its best stocks are an eclectic group and include:
American Tower
(AMT) - Get American Tower Corporation Report
, a provider of telecommunications relay towers, up 59%; hotelier
Marriott International
(MAR) - Get Marriott International, Inc. Class A Report
, up 51%; luxury-goods retailer
Coach
, up 55%; and coffee-shop chain
Starbucks
(SBUX) - Get Starbucks Corporation Report
, up 44%.
4.
FIDELITY CONTRAFUND
(FCNTX) - Get Fidelity Contrafund Report
RETURN
: 13%
ASSETS
: $71 billion
MANAGER
: William Danoff, since September 1990
TOP STOCKS
:
Apple
(AAPL) - Get Apple Inc. Report
, 7%,
(GOOG) - Get Alphabet Inc. Class C Report
, 5.5%, and
Berkshire Hathaway
undefined
, 3.5%
BIG WINNER
:
Discovery Communications
(DISCA) - Get Discovery, Inc. Class A Report
, up 39%.
STRATEGY
: The portfolio is made up of 502 stocks and two bonds, and it has only 30% of its assets in the top 10 holdings, so it's as diverse a fund as you'll find. Turnover is 58%. Computer hardware is the largest sector weighting at 19.3%.
Danoff must love Mexican food as the restaurant chain
Chipotle Mexican Grille
(CMG) - Get Chipotle Mexican Grill, Inc. Report
is the top performer in both of the funds he manages.
A top fund manager investing in another top investment manager makes for an interesting choice, as
Berkshire Hathaway
, up 22%, is the third-largest holding, at 3.5%.
Danoff has all his investment bases covered, as about 3% of the fund is in gold stocks:
Newcrest Mining
(NCM)
,
Goldcorp
(G) - Get Genpact Limited Report
and
Kinross Gold
(KGC) - Get Kinross Gold Corporation Report
.
3.
CALAMOS GROWTH
(CVGRX) - Get Calamos Growth A Report
RETURN
: 14%
ASSETS
: $8.3 billion
MANAGER
: John Calamos Sr. and Nick Calamos, both since September 1990; John Calamos Jr. (1994); plus a roster of eight other managers added since then.
TOP STOCKS
:
(GOOG) - Get Alphabet Inc. Class C Report
, 4.8%,
Apple
(AAPL) - Get Apple Inc. Report
, 4.5%, and
Amazon
(AMZN) - Get Amazon.com, Inc. Report
, 4%
BIG WINNER
:
FS Networks
, up 160%.
STRATEGY
: This fund lists 11 managers who oversee a portfolio of 155 stocks, with 31% of assets in its top 10 stocks. Turnover is 52%. Although its performance has been volatile recently -- it lost 50% in 2008, then returned 53% in 2009 -- its long-term record is stellar. It has a 14.3% annualized return over the past 15 years, making it the top-performing large-growth fund in that period, according to Morningstar.
Three of the top four holdings are big gainers:
Apple
, up 51%,
Amazon
(AMZN) - Get Amazon.com, Inc. Report
, up 31%, and
Priceline
(PCLN)
, up 89%.
FS Networks
, up 160%, makes products that manage computer networks and security.
2.
FIDELITY BLUE CHIP GROWTH
(FBGRX) - Get Fidelity Blue Chip Growth Report
RETURN
: 14%
ASSETS
: $13 billion
MANAGER
: Sonu Kalra, since July 2009
TOP STOCKS
:
Apple
(AAPL) - Get Apple Inc. Report
, 7%,
(GOOG) - Get Alphabet Inc. Class C Report
, 4%, and
Amazon
(AMZN) - Get Amazon.com, Inc. Report
, 2.6%
BIG WINNER
:
Las Vegas Sands
(LVS) - Get Las Vegas Sands Corp. Report
, up 219%.
STRATEGY: This is more than a blue-chip fund, although it hews to its growth-category definition. It carries a huge 275-stock portfolio, with only 26% of its assets in the top 10 stocks. It has its share of blue-chippers, such as
Ford
(F) - Get Ford Motor Company Report
,
Macy's
and
Coca-Cola
(KO) - Get Coca-Cola Company Report
in its top 25 stocks.
But computer-hardware firms are a favorite, at a 19% sector weighting, and are led by
Qualcomm
(QCOM) - Get Qualcomm Inc Report
, at 2.3%, and
Hewlett-Packard
, at 1.2%. It also mixes it up with new technology picks. One example: a $74 million stake in
Baidu
(BIDU-ADR)
, the No. 1 Internet search engine in China.
The Rat Pack favorite
Las Vegas Sands
(LVS) - Get Las Vegas Sands Corp. Report
, a hotel and casino owner with plans for a big gambling complex in Macau, has also done well for this fund with its 219% return this year.
1.
FIDELITY GROWTH COMPANY FUND
(FDGRX) - Get Fidelity Growth Company Report
RETURN
: 16%
ASSETS
: $35 billion
MANAGER
: Steven Wymer, since January 1997
TOP STOCKS
:
Apple
(AAPL) - Get Apple Inc. Report
, 5.5%,
Salesforce.com
(CRM) - Get salesforce.com, inc. Report
, 4%, and
(GOOG) - Get Alphabet Inc. Class C Report
, 3%
BIG WINNER
:
Salesforce.com
, up 263%.
STRATEGY
: This massive fund, with 301 stocks, with only 25% of assets in the top 10 holdings, is as diverse as they come. Setting the tone for the year, the fund's two top holdings are both big winners:
Apple
, up 51%, and
Salesforce.com
. Computer hardware is the largest sector allocation, at 20%, followed by health care, at 17%.
Technology stocks are what helped put this fund in first place and some of the winners are
Red Hat Technologies
(RHT) - Get Red Hat, Inc. Report
, up 54%,
VeriFone Systems
(PAY)
, up 147%,
Riverbed Technologies
(RVBD)
, up 204%,
Baidu
(BIDU) - Get Baidu Inc. Report
, up 166%, and
NetApp
(NTAP) - Get NetApp, Inc. Report
, up 56%.
The fund lost 40% in 2008 but gained back about as much the following year. Still, the mutual fund has suffered outflows of about $2.3 billion, or 7% of its assets, this year, according to Morningstar.
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