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By Christine Benz and Katie Rushkewicz Reichart, CFA | 12-18-2014 11:00 AM

2014 Leaders and Laggards in Fidelity's Lineup

Two thirds of Fidelity's domestic-equity funds have beaten their category averages year to date, but some notable funds, including Contrafund and Low-Priced Stock, have looked more sluggish.

Christine Benz: Hi, I'm Christine Benz from As 2014 winds down, many Fidelity funds have enjoyed solid or better performance. Joining me to provide a recap of the year at Fidelity is Katie Reichart. She is a senior analyst in Morningstar's manager research group. Katie, thank you so much for being here.

Katie Reichart: Thanks for having me.

Benz: Let's start by discussing some of the fundamental things going on at Fidelity--some of the news coming out of Fidelity over the past year. Manager changes have definitely cooled down relative to years passed, and you think they are doing a better job on the transitions when managers leave. Let's talk about a recent manager change, though, that did in fact prompt a downgrade of the fund when the manager switch was announced.

Reichart: Fidelity Small Cap Value (FCPVX) was recently downgraded from Silver to Bronze. Chuck Myers had run it for several years. He is handing that off to his comanager Derek Janssen, and Myers will actually still be around next year helping out. So, by the time Janssen is running it solo, he'll have been with Myers for about three years. So, that certainly is a different tact from what Fidelity has taken in years past. We did downgrade it, though, because Janssen doesn't have his own record running money, and so we're just being a little cautious there.

Benz: You and the team also spend time evaluating a firm's corporate culture. You grade them based on their corporate culture. In 2014, you did make a change, upgrading Fidelity's corporate culture. Let's talk about the change you made and what prompted it.

Reichart: They were upgraded from a C to a B for corporate culture, and I think they've just taken a more thoughtful approach with certain things like manager transitions. They have put a lot more emphasis around creating better value and equity-income teams. I think that will help the investor in the long run. Then, of course, their fixed-income efforts continue to be very strong. So, there is recognition of that, too.

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