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Is Fidelity Small Cap Value (FCPVX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Small Cap Value (FCPVX). FCPVX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FCPVX. Fidelity Small Cap Value debuted in November of 2004. Since then, FCPVX has accumulated assets of about $2.57 billion, according to the most recently available information. Derek Janssen is the fund's current manager and has held that role since February of 2021.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 8.65%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 13.88%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of FCPVX over the past three years is 25.41% compared to the category average of 17.41%. Over the past 5 years, the standard deviation of the fund is 22.21% compared to the category average of 15.49%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.09, so it is likely going to be more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -2.94, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.

The mutual fund currently has 97.77% of its holdings in stocks, which have an average market capitalization of $5.37 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance
  2. Other
  3. Industrial Cyclical
  4. Retail Trade
With turnover at about 39%, this fund makes fewer trades than the average comparable fund.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FCPVX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 1.22%. So, FCPVX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, Fidelity Small Cap Value ( FCPVX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on the Mutual Fund Equity Report area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FCPVX too for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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