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Fidelity Growth & Income Holds Up Well in 2000's Tech Meltdown

After shining in 2000's fourth quarter, Fidelity Growth & Income stumbles a bit.

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At first glance, it might appear that early 2001 has been Fidelity Growth & Income's (FGRIX) kind of market. It hasn't.

Although this fund has a big underweight in tech, which has fallen sharply in 2001's early going, it is nevertheless off to a subpar start this year. For the year to date through March 7, 2001, the fund has lost 5.4% in a difficult market, leaving it a percentage point behind its benchmark, the S&P 500 index. A few factors have hampered the fund. Manager Steve Kaye has consistently favored fee-rich financials over banks with more credit risk. That was a winning bet between 1998 and 2000, but over the past few months, regional banks have rallied sharply. Many retail stocks have posted strong returns in 2000, but Kaye has maintained a below-market stake in that sector. Furthermore, the fund has relatively little exposure to the one area of tech that has soared in 2001: PC-related stocks such as Dell Computer (DELL) and Microsoft (MSFT).

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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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