Fidelity Contrafund Commingled Pool

en-US Among the best. Will Danoff has masterfully run this fund since September 1990, posting competitive results even as its assets have ballooned. Danoff's unique ability to steer this massive strategy through multiple market cycles merits a High People rating. Danoff leverages the research of Fidelity's well-regarded and deep analyst bench, but he isn't overly dependent on it either. Granted, the analysts' company-specific insights are critical to Danoff effectively overseeing the fund's portfolio of 300-plus stocks. And as Danoff commands more than $140 billion in assets across all his charges, the analysts have considerable incentives to relay their best ideas to him. But Danoff doesn't just take their word for it. He is active in research and has become well known for keeping a tattered notebook that lists the tickers of and notes about the companies he's met. Danoff's heavy asset-load magnifies key-person risk and makes capacity a concern. Danoff, though, has said he's not ready to retire anytime soon and he has more help than in the past. In 2013, John Roth became comanager alongside Danoff at the $26 billion Fidelity Advisor New Insights FINSX, though Danoff also solely runs the $7 billion Fidelity Series Opportunistic Insights FVWSX (used exclusively in the target-date series) and a strategy that Fidelity sells in Canada. Relatively distinct given its size. Will Danoff prefers best-of-breed companies with competitive advantages significant enough to repel would-be rivals, and it regularly shows in this fund's portfolio. In December 2019, for example, over 95% of the fund's assets were in firms with either wide or narrow Morningstar Economic Moat Ratings. Despite the fund's large asset base and its hundreds of names, the portfolio has avoided looking too indexlike. It has held as much as 20% in non-U.S. equities in the past, though its 7% non-U.S. stake in December 2019 was on the low end of its normal range during the past decade. The fund's size limits Danoff's ability to take meaningful positions in all but the biggest individual companies, but he doesn't shy away from making bold bets where he can. The portfolio's top four positions--Facebook FB, Amazon.com AMZN, Microsoft MSFT, and Berkshire Hathaway BRK.A--soaked up a fourth of the fund's assets but just 11% of the S&P 500 and 17% of the Russell 1000 Growth Index. Danoff's hunt for above-average earnings growth and fondness for founder-led firms partially explain the portfolio's longstanding consumer-staples and industrials underweights. The bulk of assets are in information technology and communication services firms. Effective management of a large asset base. Will Danoff's ability to handle and even leverage the fund's massive scale to investors' advantage earns it an Above Average Process rating. Danoff's recipe for success isn't unusual. He looks for best-of-breed companies with competitive advantages, improving earnings potential, and capable leadership. These attributes are central tenets in many large-growth peers' approaches. Where this fund distinguishes itself, though, is in execution. Danoff weaves together his own analytical insights, gleaned from his more than three decades at Fidelity, with research from a deep bench of around 60 domestic equity analysts. Plus, as the biggest owner of many stocks, Danoff enjoys unparalleled access to company management, helping him understand each business' keys to growth. Capacity has long been and remains a headwind, given that Danoff manages more than $140 billion across all his accounts. To counter constraints imposed by the fund's size, Danoff has tweaked his process through the years, including trading less often, owning fewer mid- and small-cap names, and maintaining a portfolio of 270-500 stocks. These moves haven't diminished long-term performance, which remains strong. The fund has been closed in the past, but it is currently open and has experienced outflows in recent years. Core. Core This fund has stood the test of time. Fidelity Contrafund's proven manager and effective approach under Morningstar's new Analyst Rating methodology boosts the fund's cheapest share class to Gold from Silver; its more expensive share classes earn Silver. The fund's substantial merits start with its leader. Will Danoff, manager since 1990 and winner of Morningstar's Domestic-Stock Fund Manager of the Year in 2007, has excelled across multiple market cycles. Danoff isn't a one-man show, though. He combines his own insights with Fidelity's deep analyst bench. The approach here isn't unusual. Like many large-growth Morningstar Category rivals, Danoff and his team look for best-of-breed companies with competitive advantages, improving earnings potential, and capable leadership. Where the fund distinguishes itself, though, is in execution. For example, Danoff uses the fund's massive scale to his advantage. As one of the largest owners of many of the stocks the fund owns, Danoff has unparalleled access to such teams, which helps him construct the portfolio. Facebook FB, a top contributor to relative returns over the past five years, grew to become the fund's largest active weighting as of year-end 2019 in part because of Danoff's confidence in its founder and chief executive. The fund's size doesn't mean it hugs an index. Danoff crafts a well-diversified portfolio of more than 300 stocks that looks unlike either its S&P 500 prospectus benchmark or the more-relevant Russell 1000 Growth Index. In December 2019, its combined stakes in technology and communication services consumed half the fund's assets but just one third of the S&P 500's share. Financials, which occupy 13% of the fund's assets, are relatively scarce in the growth index at just 3%. The strategy's colossal asset base, which now totals over $140 billion across accounts, has long limited its flexibility. Reassuringly, its focus on liquid large-cap stocks has been persistent. It remains an outstanding offering, thanks to Danoff's experience and consistency through the years. 2146 2146 Robby Greengold, CFA Robby Greengold, CFA Fidelity earns an Above Average Parent rating because of its ability to stay ahead of its competition. The firm's successful stock-picking mutual funds fueled its rise to prominence, and it has adapted well to investor preferences that have shifted markedly over the past two decades. Index funds and ETFs have garnered most of the industry's flows as money has gushed from actively managed products--Fidelity's included. Yet overall, the asset management division has continued to achieve positive organic growth by introducing or maintaining aggressive pricing on its own suite of passively managed funds and expanding its menu of client-demanded investment structures, such as managed accounts and collective investment trusts. These moves are made possible by the firm's strong distribution network, scale, established brand, and willingness to tolerate losses on some products in pursuit of broader strategic objectives. Fidelity continues to invest heavily in its active managers' analytical and technological resources. It is home to a handful of the industry's most talented equity managers and boasts a topnotch fixed-income division. Across asset-class teams, elevated levels of turnover within its leadership ranks bear watching. Overall, though, the firm has served fundholders well through its competitive capabilities and costs. Competitive on several fronts. 2020-01-13T10:52:00 2020-01-13T16:52:00Z An outstanding 30-year track record. The fund has regularly been a top large-growth offering under Will Danoff, who has managed it since September 1990. During his tenure, the fund has gained 13.3% annualized through January 2020, versus 10.5% for both the S&P 500 and Russell 1000 Growth Index. Danoff's record is impressive considering he oversees more than $140 billion of assets in total. Undoubtedly, this huge fund is less flexible than the $7 billion Fidelity Series Opportunistic Insights FVWSX, which Fidelity uses exclusively in its target-date series. Since that smaller sibling's late 2012 debut, it has beat this fund--but both are ahead of the S&P 500. This fund's volatility is subdued for a growth strategy. Danoff, a firsthand witness to more than one major market blowup, has outperformed large-growth peers and the Russell 1000 Growth Index in down markets during his tenure, including the 2000s' two extended bear markets. The fund's pattern of downside protection is unmistakable over shorter periods, too. Across the index's 57 money-losing one-year rolling periods since Danoff's start, the fund did better four fifths of the time. The fund holds its own in up markets but doesn't always lead the way. Danoff prefers firms with tangible signs of improving earnings to more-speculative fare, which means the fund can lag in market environments like 2009's rally. It's critical to evaluate expenses, as they come directly out of returns. The share class on this report levies a fee that ranks in its Morningstar category's cheapest quintile. Based on our assessment of the fund's People, Process and Parent pillars in the context of these fees, we think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Analyst Rating of Gold. F00000YI8R This fund has stood the test of time. Fidelity Contrafund's proven manager and effective approach under Morningstar's new Analyst Rating methodology boosts the fund's cheapest share class to Gold from Silver; its more expensive share classes earn Silver. The fund's substantial merits start with its leader. Will Danoff, manager since 1990 and winner of Morningstar's Domestic-Stock Fund Manager of the Year in 2007, has excelled across multiple market cycles. Danoff isn't a one-man show, though. He combines his own insights with Fidelity's deep analyst bench. The approach here isn't unusual. Like many large-growth Morningstar Category rivals, Danoff and his team look for best-of-breed companies with competitive advantages, improving earnings potential, and capable leadership. Where the fund distinguishes itself, though, is in execution. For example, Danoff uses the fund's massive scale to his advantage. As one of the largest owners of many of the stocks the fund owns, Danoff has unparalleled access to such teams, which helps him construct the portfolio. Facebook FB, a top contributor to relative returns over the past five years, grew to become the fund's largest active weighting as of year-end 2019 in part because of Danoff's confidence in its founder and chief executive. The fund's size doesn't mean it hugs an index. Danoff crafts a well-diversified portfolio of more than 300 stocks that looks unlike either its S&P 500 prospectus benchmark or the more-relevant Russell 1000 Growth Index. In December 2019, its combined stakes in technology and communication services consumed half the fund's assets but just one third of the S&P 500's share. Financials, which occupy 13% of the fund's assets, are relatively scarce in the growth index at just 3%. The strategy's colossal asset base, which now totals over $140 billion across accounts, has long limited its flexibility. Reassuringly, its focus on liquid large-cap stocks has been persistent. It remains an outstanding offering, thanks to Danoff's experience and consistency through the years. 2146 2146 Robby Greengold, CFA Robby Greengold, CFA Fidelity earns an Above Average Parent rating because of its ability to stay ahead of its competition. The firm's successful stock-picking mutual funds fueled its rise to prominence, and it has adapted well to investor preferences that have shifted markedly over the past two decades. Index funds and ETFs have garnered most of the industry's flows as money has gushed from actively managed products--Fidelity's included. Yet overall, the asset management division has continued to achieve positive organic growth by introducing or maintaining aggressive pricing on its own suite of passively managed funds and expanding its menu of client-demanded investment structures, such as managed accounts and collective investment trusts. These moves are made possible by the firm's strong distribution network, scale, established brand, and willingness to tolerate losses on some products in pursuit of broader strategic objectives. Fidelity continues to invest heavily in its active managers' analytical and technological resources. It is home to a handful of the industry's most talented equity managers and boasts a topnotch fixed-income division. Across asset-class teams, elevated levels of turnover within its leadership ranks bear watching. Overall, though, the firm has served fundholders well through its competitive capabilities and costs. Competitive on several fronts. 2020-01-13T10:52:00 2020-01-13T16:52:00Z An outstanding 30-year track record. The fund has regularly been a top large-growth offering under Will Danoff, who has managed it since September 1990. During his tenure, the fund has gained 13.3% annualized through January 2020, versus 10.5% for both the S&P 500 and Russell 1000 Growth Index. Danoff's record is impressive considering he oversees more than $140 billion of assets in total. Undoubtedly, this huge fund is less flexible than the $7 billion Fidelity Series Opportunistic Insights FVWSX, which Fidelity uses exclusively in its target-date series. Since that smaller sibling's late 2012 debut, it has beat this fund--but both are ahead of the S&P 500. This fund's volatility is subdued for a growth strategy. Danoff, a firsthand witness to more than one major market blowup, has outperformed large-growth peers and the Russell 1000 Growth Index in down markets during his tenure, including the 2000s' two extended bear markets. The fund's pattern of downside protection is unmistakable over shorter periods, too. Across the index's 57 money-losing one-year rolling periods since Danoff's start, the fund did better four fifths of the time. The fund holds its own in up markets but doesn't always lead the way. Danoff prefers firms with tangible signs of improving earnings to more-speculative fare, which means the fund can lag in market environments like 2009's rally. It's critical to evaluate expenses, as they come directly out of returns. The share class on this report levies a fee that ranks in its Morningstar category's middle quintile. That's not great, but based on our assessment of the fund's People, Process and Parent pillars in the context of these fees, we think this share class will still be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Analyst Rating of Silver. FOUSA00CEO Live