Attribution Analysis of US Mutual Funds through November 2015
Performance evaluation
The Fidelity Blue Chip Growth Fund (FBGRX) rose 0.8% in November 2015 from October’s reading. In the three-month and six-month periods ended November 30, the fund has fallen 1.3% and 5.1%, respectively. In the one-year period, FBGRX is up 6.2%. From the end of November until December 15, 2015, the fund is down 1.1%. In the year-to-date period, which we will analyze in this article, the fund is up by 6.8%.
FBGRX has generally been a below-average performer for all periods under review. The fund has had a particularly bad last three and six months, as it stood last and second-to-last in these periods, respectively. However, it stood at a slightly better sixth place year-to-date. Let’s look at what has contributed to this below-average performance by the fund.
Portfolio composition and contribution to returns
FBGRX was incepted in December 1987, and the latest complete portfolio available for the fund is as of October 2015. We will use that portfolio as our base and consider valuation changes as they stand at the end of November 2015 for our analysis. All portfolio percentages refer to their weights according to changes in valuation from October to November.
The fund’s top two invested sectors, information technology and consumer discretionary, in that order, also emerged as the top two positive contributors to returns YTD 2015 through November.
The contribution from the information technology sector was led by Class A shares of Alphabet Inc. (GOOG). Facebook (FB) was a distant second to Alphabet in terms of the level of positive contribution. Activision Blizzard, Inc. (ATVI) and Salesforce.com (CRM) were other major contributors to the sector’s returns.
The consumer discretionary sector was helped by the contribution from Amazon.com, Inc. (AMZN), which contributed three-fourths of the sector’s total contribution. Meanwhile, Groupon, Inc. (GRPN) and GoPro, Inc. (GPRO) were the top two detractors for the period.
Reasons for below-average performance
Consumer staples and industrials were significant negative contributors to FBGRX’s returns for this period. While Keurig Green Mountain (GMCR) hurt the consumer staples sector, American Airlines Group (AAL) dragged on the industrials sector.
Materials surprised by forming just over 1.1% of the fund’s portfolio, and they emerged as the third-largest negative contributor with nearly all holdings contributing negatively. CF Industries Holdings (CF) and *E. I. du Pont de Nemours and Company (DD) led the detractors.