Fidelity® Balanced Fund

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

#15 in Moderate Allocation

U.S. News evaluated 247 Moderate Allocation 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 16.09 percent over the past year, 10.65 percent over the past three years, 16.55 percent over the past five years, and 7.40 percent over the past decade.

Trailing Returns Updated 03.31.2014
Year to date 2.0%
1 Year 16.1%
3 Years (Annualized) 10.7%
5 Years (Annualized) 16.6%
10 Years (Annualized) 7.4%

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Summary

The Fidelity Balanced Fund experienced some big changes recently. With a new manager on board, the fund focuses on large-cap companies, and it’s following a new benchmark—the S&P 500 Index.

As of April 22, 2014, the fund has assets totaling $25.49 billion. Its portfolio consists of large value and growth stocks as well as bonds of both domestic and foreign companies.

According to the fund’s prospectus, approximately 60 percent of its assets are invested in equities and at least 25 percent of assets are invested in fixed-income securities, such as debt securities and preferred stock. The fund tends to mirror the S&P 500 index’s sector weightings, although management will invest outside the index. Stock selections within the technology-semiconductor and energy sectors as well as consumer staples within emerging markets were top contributors to the fund’s recent performance. The fund returned 28.1 percent in 2009 and landed in the top third of Morningstar's moderate allocation category for that year. The fund has returned 16.09 percent over the past year and 10.65 percent over the past three years.

From 2000 to 2008, the fund saw three changes of the guard. The most recent change was in October 2008 when Bob Stansky—who ran Fidelity Magellan in the late 1990s and the first part of this decade—and an eight-member team took over the fund, which was previously run by Larry Rakers. Stansky switched the fund from its previous benchmark of Russell 3000 and Russell 3000 Value indexes to the S&P 500 index, and he has whittled the fund’s holdings from 600 to 400, with a greater selection of large-caps. The fund has returned 16.55 percent over the past five years and 7.40 percent over the past decade.

Investment Strategy

Lead manager Bob Stansky keeps the fund’s sector weightings aligned with the S&P 500 index. The fund’s security selections are made by the management team’s sector specialists, who pick the best stocks based on their specific sectors.

Role in Portfolio

Morningstar says the fund is a core portfolio holding.

Management

Since October 2008, Bob Stansky has been the lead manager of the fund. He relies on a multimanager team to help make security selections. The group has a variety of experienced Fidelity advisers, including Steve Kaye, who was the former Fidelity Growth & Income manager. Fixed-income manager George Fischer joined the fund in 2004.

Fees

Fidelity® Balanced Fund has an expense ratio of 0.57 percent.

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Risk

The fund’s objective is to “seek income and capital growth consistent with reasonable risk,” according to the prospectus. The relatively new management team poses a general risk to the fund, according to Morningstar.

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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 2014-04-10

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 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Risk Rank, a measure of volatility, is 2 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-04-10

In the annual Lipper/Barron’s Fund Families Survey for 2010, Fidelity 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 a lot of 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 2011-04-06

In the annual Lipper/Barron’s Fund Families Survey for 2010, Fidelity 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 a lot of 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 2011-04-06