This list features solid winners, battered options, and question marks.
When Fidelity lowered the expense ratio of Fidelity Spartan 500 Index
Since that time, Spartan 500 Index has more than doubled in size while many of Fidelity's actively managed large-blend funds have shrunk--some in dramatic fashion. Indeed, Spartan 500's current $49 billion asset base is now significantly higher than the combined assets of the 14 actively managed funds advised by Fidelity in the category. Spartan 500's fee cut was not the sole reason, though--some of the largest funds in that group of 14 proceeded to stink up the joint. However, there are still worthy choices among them. Let's run through the full list, from largest to smallest.
Fidelity Dividend Growth
These are arguably the best choices in the group. Larry Rakers has managed the two funds (in an identical manner) for just four years, but he's run diversified Fidelity stock funds for 10. (He previously managed the equity sleeve of moderate-allocation fund Fidelity Balanced
Fidelity Disciplined Equity
These three large-blend funds are among the few Fidelity offerings run primarily by quantitative stock-picking models. Manager Keith Quinton has run Disciplined Equity since 2006, Tax-Managed Stock since 2004, and Advisor 130/30 Large Cap (which combines a leveraged long equity portfolio and short sales) since its 2008 inception. The quant models employed by Quinton had a horrendous run during the tumultuous markets of 2008-11, a big reason all three funds have lagged their typical category peer on his watch. The latter two funds have less than $100 million in combined assets due to outflows and are slated to close to new investors soon--we expect they'll soon be merged or liquidated. Beyond its modest fees, there's no compelling reason to invest in Disciplined Equity. Although it performed fairly well in the early 2000s, that was before Quinton took over and made changes to the investment process.
Fidelity Capital Appreciation
An old Fidelity hand runs this fund. Fergus Shiel has managed diversified funds at the firm since 1994, with the exception of a 2.5-year period when he left Fidelity to start a hedge fund. He came back in late 2005 to take over this one when then-skipper Harry Lange moved on to Fidelity Magellan FMAGX. Shiel has long employed a freewheeling strategy; he uses both fundamental and technical analysis, essentially buys whatever looks attractive to him on a risk/reward basis, and trades rapidly. This approach generated strong (though volatile) results during a 1996-2003 stint at Fidelity Independence
Fidelity Growth & Income
Matt Fruhan currently manages all of these funds. Growth & Income had $32 billion in assets in 2004 (and the Advisor version had another $2 billion), but it shriveled dramatically after prior skippers Steve Kaye, Tim Cohen, and James Catudal produced bottom-quartile showings each year from 2005 to 2009. Fruhan took the helm of Growth & Income and Advisor Growth & Income in early 2011. He's boosted the dividend payout of both funds and keeps their sector weightings close to those of the S&P 500. It remains to be seen whether he can turn these funds around.
Fruhan has delivered fine returns since 2005 at Large Cap Stock and Advisor Large Cap, but he's had more freedom to deviate from the index at those offerings than at Growth & Income and Advisor Growth & Income. Tilting more toward secular or cyclical growth stocks has worked well at these funds; although the ride has been bumpy, they've beaten the S&P on a risk-adjusted basis and are attractive holdings.
Finally, Fruhan took over Mega Cap Stock in early 2009. He applies much the same strategy here as at the two funds above, but he's fishing from a smaller pond of huge companies. (The fund's average market capitalization is double that of the S&P 500.) Thus far, the fund has handily beaten its benchmark, the Russell Top 200 Index, on his watch. So it's a fine holding for investors who want dedicated exposure to the market's behemoths.