Relatively speaking, Fidelity Trend Fund (FTRNX) has the wind to its back, explains mutual fund expert John Bonnanzio, a specialist in Fidelity funds and contributing editor to Fidelity Monitor & Insight Report.

Despite being positioned as a “defensive growth” fund, this large-cap growth offering still faced strong headwinds last month: it retreated 4.0%. However, that was better than most of its 14 other peers which, on average, declined 6.2%. Give credit to Shilpa Mehra.

A co-manager new to the fund last year, she’s since taken full control from Dan Kelley who’s now running Fidelity’s just-launched Founders Fund.

One reason for Trend’s modest, relative outperformance in recent months is that Shilpa’s investment style is much the same as her predecessor’s, which could be called “chicken growth.”

Granted, Trend’s top-10 holdings consist of mostly FAANGs — with the notable exception of Facebook (FB). But Shilpa keeps a long-term eye on companies with sustainable earnings growth — even in a slowing economy.

Couple that with a sensitivity to valuations and a predilection for temporarily mispriced stocks, and you wind up with a fund that has made a troubled Seattle-based airframe manufacturer, Boeing (BA), a recent top-10 holding.

Indeed, Shilpa’s investment strategy is to ferret out defensive growth stocks. “People often think being defensive means hiding out in bond proxy sectors, such as consumer staples or utilities,” she says. “But they often lack strong long-term earnings-growth prospects.”

So Shilpa looks for sustainable earners that she believes exist in all sectors in all market environments. Why? “(They) hold up well in turbulent markets and deliver strong results in up markets.” The evidence is mounting that Shilpa’s investment philosophy and stock selection process are bearing fruit.

Though unlikely to lead other large-cap growth funds in up-market cycles, Fidelity Trend is providing modest (relative) outperformance during choppy periods. As such, we’ve upgraded Fidelity Trend to a "Buy" rating.

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