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Why We've Downgraded Fidelity Contrafund

One substantial disadvantage drove the rating downgrade for this otherwise excellent fund, says Morningstar's analyst.

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Fidelity Contrafund (FCNTX) remains excellent, but its colossal asset base is a substantial disadvantage and warrants a Morningstar Analyst Rating downgrade to Silver from Gold.

With around $250 billion in assets, the strategy amounts to a hefty 0.65% of the S&P 500's aggregate market value and is far less agile and adaptable than its large-growth peers, most of which hold less than $500 million. The handful of other large-cap funds to have previously amassed a similar size went on to show significant degradation in their excess returns as their opportunity set effectively shrank and they became harder to maneuver.

Robby Greengold does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.