In this brutal market, if you're looking for some guidance from the biggest players, your timing couldn't be better.
Late last week, Boston fund behemoth
released a list of its top holdings as of the end of the third quarter. While the quarterly report is limited to what Fidelity did in the
, it does show which stocks are recently enjoying the firm's hefty support -- that's support that could help lend some cushion in a market where any cushion helps.
Fidelity's stock funds have a whopping $600 billion in total investments. Though the firm's managers aren't known for their group-think, they typically work from the same research and their firmwide holdings represent their analysts' consensus.
The chart below shows the top 20 holdings. (
Click here for a look at Fidelity's top 50 holdings and their year-to-date returns.)
The quarterly report shows big investments in "New Tech" stocks like
, along with decidedly low-octane fare like financial services stocks and
"I think what you're seeing is a little prudence," says Jim Lowell, editor of the independent newsletter and Web site
. "Here they're taking a barbelled approach, trying to offset bets on where they think they'll find strong growth with defensive plays. Nothing shows that more than their top-two holdings:
At the end of the
second quarter, Fidelity's managers had a big tech appetite, but the Sept. 30 report shows some temperance, too. Tech stocks like data-storage concern
, server kingpin
and software shop
moved up in the ranks during the third quarter. But so did lower-octane financial services stocks with potentially less downside risk, like
The firm invested more than $1 billion each in 10 stocks during the third quarter, and that pack of faves shows the same growth/value streak. At the top of the list are hand-held device maker Palm and networker Ciena. But on the same list you'll also find
While these moves do suggest a somewhat guarded approach, they also provide a glimpse into where the firm's stock pickers are seeing future growth, namely in wireless and networking stocks. The firm's decision to
Fidelity Select Wireless
Fidelity Select Networking & Infrastructure
funds this year also illustrate its bullishness on the subsectors.
"In this market it doesn't make sense to take a lot of huge risks," says Lowell. "We're not seeing a clear picture of how big this slowdown will be or even who the president will be. Still, they have to step up to the plate and take some bets -- and they're taking those bets in wireless and infrastructure."
But Fidelity managers weren't on a pure buying spree in those areas. Finnish wireless shop
, for instance, was the firm's 23rd largest holding on June 30, but fell to 73rd by Sept. 30, thanks to flagging performance and stock sales by Fido.
Fidelity managers also sharply reduced their stakes in struggling networker
and wireless concern
The firm's moves might not be bad finger posts in a tough market: More than 30 of Fidelity's top 50 picks are above water since Jan. 1, while the
is down 6% on the year.