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Tech Phobia Buoys Fidelity Dividend Growth

Fidelity Dividend Growth Fund's manager's eschewal of tech pays off in late 2000, early 2001.

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Fidelity Dividend Growth Fund (FDGFX) never caught tech fever, and that has kept shareholders' wallets a lot healthier.

If you know a fund's tech weight, you have a pretty good idea how it has performed over the past year. This tech-light offering has handily outpaced most of its rivals during that period. Manager Charles Mangum looks for stocks with reasonable valuations, and most tech stocks--particularly Internet-related issues--haven't met his criteria. Instead, Mangum has favored stocks in financials and health care, and that decision paid particularly big dividends toward the end of 2000. For example, last year Fannie Mae (FNM) and Eli Lilly (LLY) each surged 42%. Those stocks have taken breathers in early 2001, but they've still held up better than most tech issues. And within tech, Mangum's reasonably priced picks, including IBM (IBM), Microsoft (MSFT), and Dell Computer (DELL), have generally outperformed more-speculative fare during 2001's early going. For the year to date through March 6, 2001, the fund had lost 2.5%. That might not sound like much of a return, but it bettered more than four fifths of the fund's peers'.

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

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