Fidelity Favorites: Top Managers at Top Funds

07/20/2016 9:00 am EST

Focus: FUNDS

John Bonnanzio

, Funds Net Insight

John Bonnanzio is a leading mutual fund expert and a specialist on the Fidelity family of funds. Here, the editor of Fidelity Monitor & Insight highlights a trio of favored funds.

Contrafund (FCNTX) is Fidelity’s most conservatively positioned large-cap growth fund; its volatility is 16% lower than its peers.

Nevertheless, Contra underperformed its benchmark by almost nearly three percentage points in the first quarter and five percentage points for the year-to-date.

While the past isn’t necessarily prologue, under legendary manager Will Danoff, Contra’s history suggests that such a period of relative weakness may be followed by outperformance.

Indeed, the fund’s low turnover rate of 35% amply suggests that its manager has plenty of patience for his “story” to work itself out.

Event Driven Opportunities (FARNX) moves to the beat of its own drummer. Bench-marked against the extremely broad Russell 3000 Index, Manager Arvind Navaratnam can pretty much buy whatever he wants.

Indeed, it has a low correlation to the big-cap S&P 500, mostly because it’s essentially a small-cap value fund. Always in search of various “special situations” to exploit (such as spinoffs, mergers, management realignments and even product repositionings), the goal here is to produce a high total return for shareholders.

Though this has been a tough year to make any gains, since the fund’s December 2013 inception, it has managed to outperform 99% of its similarly benchmarked peers.

The quintessential stockpicker, even Joel Tillinghast — manager at Low-Priced Stock (FLPSX) — has been struggling this year.

With nearly 900 stocks, he’s always holding plenty of winners and losers. But with overseas markets down this year, the fund’s 33% foreign stake has been a hindrance.

Fortunately, however, Joel has also been defensive, increasing cash to 13% of assets. If that figure falls to below 10%, he’s probably scooping up more of the inexpensive stocks that have made him one of the best managers of the last quarter-century!

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