IT Stocks Helped the Fidelity Growth Company Fund in 2015
How the Cards Fell for 11 Large-Cap Mutual Funds in 2015
Performance evaluation
The Fidelity Growth Company Fund (FDGRX) fell 1.0% in December 2015 from a month ago. In the three-month and six-month periods ended December 31, the fund has risen 9.4% and 1.6%, respectively. In the one-year period, the fund is up 7.9%. Meanwhile, from the end of December until January 20, the fund is down 11.2%, the most among the 11 funds in this review.
The fund did not have a great December, but for all of the other periods under review, it has been an above average performer. For the one-year period, it stood third among the 11 funds in this review. Let’s look at what has contributed to the fund’s strong performance.
Portfolio composition and contribution to returns
The FDGRX has been around since January 1983. The latest complete portfolio breakdown available for the fund is from November 2015. Thus, we will take that portfolio as our base and consider valuation changes as they stood at the end of December 2015 for our analysis. All portfolio percentages mentioned from here on refer to their weights as per changes in valuation from November to December.
Stocks from the information technology sector were not only the single largest sectoral component, but they were also the biggest positive contributors to the fund’s returns in 2015. NVIDIA (NVDA) was the biggest contributor to the sector’s returns. It was closely followed by Salesforce (CRM) and Class A shares of Alphabet (GOOG). However, negative contributions from Twitter (TWTR) and Qualcomm (QCOM), among others, reduced the sector’s contribution to the fund a little.
The consumer discretionary sector was the second biggest positive contributor after the information technology sector. Amazon (AMZN) was the sector’s star performer, almost single-handedly powering the sector ahead. Starbucks (SBUX) was a very distant second. Meanwhile, Kate Spade (KATE) and Lumber Liquidators Holdings (LL) were among the major but not sizable detractors.
Reasons for FDGRX’s strong performance
Stock picks for the top two sectors helped it post strong results in 2015. Further, consumer staples emerged as a positive contributor while energy picks did not drag as much as they did on some of its peers. Industrials were the largest sectoral negative contributor (UNP) (UAL), but some of the drag was offset by companies like JetBlue Airways (JBLU).
Let’s move to the next fund under review: the Franklin Growth Fund – Class A (FKGRX).
Browse this series on Market Realist:
