Attribution Analysis of US Mutual Funds through November 2015
The Fidelity Growth Company Fund
According to the fund’s management, the Fidelity Growth Company Fund (FDGRX) “normally invests primarily in common stocks of domestic and foreign issuers that Fidelity Management & Research Company (FMR) believes offer the potential for above-average growth. Growth may be measured by factors such as earnings or revenue.”
The fund manager makes use of fundamental analysis, which includes factors like the financial condition and industry position of each issuer. It also looks at economic and market conditions while selecting securities for the portfolio. This fund is closed to new investors.
The Fidelity Growth Company Fund’s (FDGRX) assets were invested across 387 holdings in stocks and cash as of October 2015, and it was managing $41.13 billion in assets as of the end of November.
As of the October portfolio, FDGRX’s equity holdings included NVIDIA Corporation (NVDA), Regeneron Pharmaceuticals, Inc. (REGN), Alkermes (ALKS), Monster Beverage Corporation (MNST), and Alnylam Pharmaceuticals (ALNY), comprising a combined 9.0% of the fund’s portfolio.
Historical portfolios
For this analysis, we will consider FDGRX’s holdings as of October 2015, which comprise the latest available sectoral breakdown. The post-October holdings reflect the valuation-driven changes to the portfolio, not the actual holdings.
The information technology sector occupies ~37% of the fund’s portfolio, making it the biggest sectoral holding. The healthcare sector follows, making up 22.2% of the fund’s assets. Stocks from the consumer discretionary sector comprise 18.5% of the fund’s portfolio and round off the top three invested sectors.
From November 2014–November 2015, FDGRX’s fund manager increased its exposure to consumer discretionary and information technology stocks. An increase in consumer spending over the past two quarters may have been the primary reason for moving from consumer staples to consumer discretionary.
Apart from staples, energy, and materials, stocks have seen a reduced share of the portfolio’s pie. The fund manager exited the utilities sector completely in March 2015 and has just a small exposure to telecom services.
How has FDGRX’s composition impacted its performance for the year-to-date period as of November 2015, and what can it be attributed to? Let’s look at that in the next article.
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