Attribution Analysis of US Mutual Funds through November 2015
Performance evaluation
The Fidelity Growth Company Fund (FDGRX) rose 2.1% in November 2015 from the previous month, making it the month’s best performer among the 11 funds in this review. In the three-month and six-month periods ended November 30, the fund has risen 6.1% and 1.3%, respectively.
In the one-year period, FDGRX gained 9.2%, while from the end of November until December 15, 2015, the fund is down 5.1%. In the year-to-date period, the one that we’d be analyzing, the fund has returned 9.0%.
The Fidelity Growth Company Fund (FDGRX) has been an above-average performer for all periods under review. Except for the three-month and six-month periods, it has been among the top three funds with respect to performance.
Year-to-date, FDGRX stood third among the 11 funds in this review. Let’s look at what contributed to this strong performance by the fund.
Portfolio composition and contribution to returns
FDGRX was incepted in January 1983, 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 as of the end of November 2015 for our analysis. All portfolio percentages refer to their weights according to changes in valuation from October to November.
Stocks from the information technology sector were not only the single-largest sectoral component, they were also the biggest positive contributors to the fund’s returns in year-to-date as of November 2015. Salesforce.com (CRM) was the biggest contributor to the sector’s returns. It was closely followed by NVIDIA Corporation (NVDA) and Class A shares of Alphabet Inc. (GOOG). However, negative contributions from Twitter (TWTR), Qualcomm (QCOM), and Rackspace Hosting (RAX) reduced the sector’s contribution to the fund.
Consumer discretionary followed information technology, beating healthcare for the second spot. Amazon.com (AMZN) was the star performer from the sector, contributing well over half of the sector’s total contribution to the fund. Starbucks Corporation (SBUX) was a distant second. Meanwhile, Kate Spade & Company (KATE) and Lululemon Athletica (LULU) were among its detractors.
Reasons for the fund’s good performance
Stock picks for the top three invested sectors fired for FDGRX, helping it post a strong showing in YTD 2015 through November. However, some sizable individual negative contributors from winning sectors, as well as some drag from industrials (UNP) (SAVE), kept the fund from posting further gains.