US Videos

2 Different Paths to Growth Stocks

Katie Rushkewicz Reichart, CFA

Katie Reichart: Fidelity New Millennium (FMILX) and Fidelity Mid-Cap Stock (FMCSX) are two Bronze-rated funds run by John Roth. Both use a similar approach, investing mostly in growth companies but also even cyclicals and out-of-favor stocks. The main difference is market cap. Mid-Cap Stock is in the mid-growth category. New Millennium is an all-cap fund and lands in the large-growth category. While both are in growth categories, their holdings span the [Morningstar Style Box].

Recently, the portfolios have inched closer to the growth/blend border as Roth has moved away from pricier stocks, especially in the healthcare sector. Roth has run New Millennium since 2006. It has beaten its benchmark, the S&P 500, during that span and its average peer. So, it earns a positive performance score. He has run Mid-Cap Stock since 2011, which has beaten its average peer but has been about in line with its S&P MidCap 400 benchmark. So, it earns a Neutral performance score. Both funds score well on price, though Mid-Cap Stock is a tad cheaper. New Millennium could be used as a core holding, while Mid-Cap Stock would play a smaller role in a portfolio.