The 5 Best Fidelity Funds for 2015

Ted

FYI: But fear not. My list of the best Fidelity funds for 2015 is designed to help you complement your existing portfolio or deliver a standalone portfolio that both runs the gamut and still delivers reasonable returns.

Before I get to my picks, let me state unabashedly and categorically that I invest in actively managed funds for three reasons: (1) My chosen active managers tend to beat their benchmarks in both bull and bear markets. (2) Fidelity’s low-cost, no-load, shareholder-focused lineup is second to none. (3) The best way to own any ETF (including Fidelity’s own commission free offerings) is only in tandem with a superior actively managed fund. In the topsy-turvy marketplace of 2015, having the following Fidelity experts help you pursue growth and income investments at home and globally isn’t just recommended. I think it’s required.
Regards,
Ted
http://investorplace.com/2014/12/5-best-fidelity-funds-2015/print

Lawlar

I like most of his choices. But I’d offer a few caveats:

1. Many of the Fidelity funds are behemoths, so it’s difficult for even its talented managers to outperform the market. Low Price Stock has a great record and a great manager, but it’s over 30 billion in assets.

2. Many of the Fidelity funds didn’t hold up well in the 2008/2009 crash. So market risk is a concern. For example, Strategic Dividend & Income fund lost 41.2% in 2008 vs. the average fund in its category of -34.4% [S&P was -37%].

3. Putting politics aside [please], the Republicans are going to put a lot of effort into gutting the Affordable Care Act. That could take a lot of money out of the health care sector. And the New York Times has had a number of enlightening articles on how hospitals, doctors, and pharmaceuticals, have been gouging (ok, charging premium prices) for services/drugs. I know there are many reasons why Select Health Care will continue to grow, but there may be a lot of price pressures and bad press weighing on this sector.

4. I think Puritan Fund deserves consideration. A long term chart of this fund shows a nice steady incline, and it did relatively well in 2008 [-29.2% ] Admittedly, it also has a bloated balance sheet of over 18 billion in assets.

davidrmoran

All good points. I have been hearing for a long time about FLPSX being way too big, but it seems never to become an insurmountable problem. I have long been a believer in Bewick, but she, like most at Fido, does not have downside 'depth' as a chief concern: that's not the kind of shop they are, rightly or wrongly. GOP efforts against ACA will fail, but yeah, the healthcare gravy days may be dialing back significantly. Certainly when I look at my Medicare statements, the hammering on price is quite unbelievable. Puritan is an old stalwart and I would've included it, and latterly FBALX as well. I also like FLVCX a lot, and FSICX to a lesser degree, and he could've included some of their smallcaps, FCNTX, junk bond, and some other things, but I was glad to be introduced to FGRTX megacap --- anyone own it?

Lawlar

David, I like your picks. I don't own FGRTX, but I'll take a second look at it.

msf

I should take a closer look at Fidelity equity funds - I'd pretty much given up on them for several years (with exceptions like FLPSX). FSDIX looks interesting, though I've always had problems fitting hybrid funds into my portfolio.

I'm not clear on the point of FGRTX, for a couple of reasons. First, why single out these companies - can you find a large cap fund that doesn't already have Apple? Why overweight megacaps?

Second, megacaps would appear to be the portion of the market least likely to benefit from active management. One can get a pure megacap passive fund like OEF (iShares S&P 100), or the more concentrated, and even cheaper, BRLIX (Bridgeway Blue Chip 35 Index)?

Regarding FLPSX ... about a decade ago, I listened to a M* analyst talk about Tillinghast, describing how he could talk intelligently about every one of the hundreds of stocks in the portfolio. He added that this skill was well beyond what he'd seen in any other manager. The comments were in response to the usual question of how big can the fund get. It seems to keep going strong.

I ascribe its underperformance in the past few years to the large percentage of foreign holdings in its portfolio. I feel that in the long run, a large percentage of foreign stocks is a plus. Though I wonder why M* doesn't reclassify the fund as a world stock fund, as it did for MQIFX Mutual Quest (formerly Mutual Qualified).

Finally, as a short term play on healthcare, if one wants to make a political wager, it might make sense to pick up FSMEX (medical supply and equipment). If there's any part of ACA likely to be jettisoned, it's the excise tax on medical devices. I don't know how much of an impact that would have, I'm bad with sectors in general, and I don't do short term trading. So consider the source of that suggestion.