Fidelity® Equity Income Fund

Scorecard
2 / 5 Stars
Lipper
2 2 4 5 3
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
3 / 5 Stars
TheStreet.com
C- (Hold)

#123 in Large Value

U.S. News evaluated 326 Large Value Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 19.79 percent over the past year, 10.49 percent over the past three years, 22.15 percent over the past five years, and 5.61 percent over the past decade.

Trailing Returns Updated 02.28.2014
Year to date 0.3%
1 Year 19.8%
3 Years (Annualized) 10.5%
5 Years (Annualized) 22.1%
10 Years (Annualized) 5.6%

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Summary

Like many income-seeking funds, Fidelity Equity-Income fund has heavy weightings in financial companies. Because of that, the fund lost lost big in 2008 but finished in the top of its class in 2009. Its performance over the long term has been much more steady.

As of March 05, 2014, the fund has assets totaling $9.60 billion. Its portfolio consists mainly of investments in large U.S. companies.

Heavy investment in the financials sector hobbled the fund’s performance in 2008, but that same strategy revived its returns in 2009. Fund manager Stephen Petersen’s quest to find undervalued companies led him back into financials. As that sector begins to recover and valuations climb, Petersen also has ventured into energy as well as industrial companies. AT&T and oil giants Chevron and ExxonMobil were also among thet fund’s top holdings, as of the end of the first quarter. The fund has returned 19.79 percent over the past year and 10.49 percent over the past three years.

Historically, Petersen’s strategy has been to pick large companies in the S&P 500 that he believes are undervalued and capable of producing high dividends. “[Petersen] believes that the market’s perceived value of a stock can overlook potential for improvement in a company’s fundamentals,” according to the fund. In the past, this strategy has led him to invest mostly in financials, energy, and telecommunications companies. The fund has returned 22.15 percent over the past five years and 5.61 percent over the past decade.

Investment Strategy

Fidelity says, “The fund seeks a yield for its shareholders that exceeds the yield on its securities compromising the S&P 500.”

Role in Portfolio

Morningstar considers Fidelity Equity-Income a “core” fund, and says, “This fund’s large-cap-heavy portfolio and the manager’s steady approach make it a solid core fund.”

Management

Stephen Petersen has managed the fund since 1993.

Fees

Fidelity® Equity Income Fund has an expense ratio of 0.66 percent.

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Risk

The fund’s focus on large caps can be a disadvantage when smaller companies rally. As of the end of 2009, the fund’s financial-related holdings make up more than a quarter of the fund’s total assets, making the fund more volatile.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 3 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 3 for one year, 3 for five years, and 4 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-03-12

In the annual Lipper/Barron’s Fund Families Survey for 2010, Fidelity Funds ranks 33rd out of 57 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of C on a scale of A to F, saying, “This fund has some good things going for it on the stewardship front, including low fees, a manager with skin in the game, and a generally attractive culture. However, other factors, including an insufficiently independent board, keep its overall grade from being higher.”

Morningstar 2011-04-13

In the annual Lipper/Barron’s Fund Families Survey for 2010, Fidelity Funds ranks 33rd out of 57 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of C on a scale of A to F, saying, “This fund has some good things going for it on the stewardship front, including low fees, a manager with skin in the game, and a generally attractive culture. However, other factors, including an insufficiently independent board, keep its overall grade from being higher.”

Morningstar 2011-04-13