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#153 in Small Blend
U.S. News evaluated 228 Small Blend Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 19.21 percent over the past year, 5.26 percent over the past three years, 21.10 percent over the past five years, and 7.33 percent over the past decade.
|Trailing Returns||Updated 03.31.2014|
|Year to date||0.5%|
|3 Years (Annualized)||5.3%|
|5 Years (Annualized)||21.1%|
|10 Years (Annualized)||7.3%|
Fund manager Andrew Sassine takes a unique approach with Fidelity Small-Cap Stock, formulating five to seven investment themes that determine which companies he includes in the fund. He also leverages the expertise of Fidelity’s team of small-cap analysts, who contribute about 40 to 45 percent of picks for the fund.
As of April 22, 2014, the fund has assets totaling almost $2.16 billion invested in 140 different holdings. Its portfolio primarily consists of small- and mid-cap stocks of U.S. companies, with a small portion of foreign holdings, mostly in the United Kingdom.
This fund took a beating during 2008’s market collapse, losing almost 53 percent between July 2008 and March 2009. Despite disappointing returns in 2008, the fund came roaring back in 2009, outperforming both its Morningstar category and benchmark by upwards of 30 percentage points. During manager Andrew Sassine’s two-year run, the fund has outpaced 85 percent of its peers in Morningstar’s small-blend category.
Although it’s billed as a small-cap fund, Fidelity Small-Cap Stock fund has almost half of its assets in midsized companies. That’s because during the financial crisis, Sassine was able to pick up many undervalued blue-chip stocks. This opportunity fed into one of his investment themes, which focused on the tech industry—specifically the miniaturization and development of mobile communications. “With the development of the iPad and iPhone, I was looking for technologies that would benefit from the touch-screen technology,” Sassine says. “When the financial crisis hit, I had a chance to buy a lot of blue-chip companies such as SanDisk. [The fund now has] a lot of these blue chip companies that I would not be able to buy today.” The fund has returned 19.21 percent over the past year and 5.26 percent over the past three years.
Another trend Sassine has his eye on involves initiatives by large corporations to update their technology infrastructure. According to Sassine, corporations are slowly beginning to feel more confident about the economic outlook and have started to upgrade their computer and telephone systems. “I have a huge investment in that, and that has struggled this year,” he says. “But I strongly believe in this theme and that the thesis will play out. If you’re patient, you’ll probably benefit in early 2011.”
Historically, the fund has performed well, landing in the top 15 percent of Morningstar’s small-blend category for three- and five-year trailing returns as of late 2010. The fund’s 10-year trailing returns put it in the top 30 percent of the category. The fund has returned 21.10 percent over the past five years and 7.33 percent over the past decade.
Taking advantage of his experience in industries such as aerospace and technology, fund manager Andrew Sassine formulates five to seven investment themes.” He then selects companies he thinks will benefit from those themes over a 12- to 18-month period. Sassine also leverages the expertise of Fidelity’s small-cap analysts, who contribute ideas for the fund as well. “It’s kind of a best-of-the-best fund,” Sassine says.
Sassine says his theme-based approach takes patience, and that investors should have a longer-term outlook when thinking about the fund’s performance. “It takes time for some of these theses to develop,” he says. “I’m a very patient investor and I’m going to be patient and hope that these things materialize.”
Role in Portfolio
Morningstar calls this fund a “supporting player.”
Andrew Sassine took over the fund in July 2008 after Paul Antico, who managed the fund since its 1998 inception, left Fidelity. Prior to taking the helm at Fidelity Small Cap Stock, Sassine ran Fidelity International Small Cap Opportunities from its August 2005 inception through December 2008.
Fidelity® Small Cap Stock Fund has an expense ratio of 0.69 percent.
The fund’s position in small-cap companies might increase stock-price volatility.