Oak Ridge Dynamic Small Cap I (ORSIX) — launched in September 2015 — seeks to capitalize...
Fidelity Focused Focuses in on Tech and Healthcare
11/27/2017 5:00 am EST
And while the fund has had its ups and downs (as all funds do), its ten-year trailing annual average total return of 8.74% (as of November 3) outpaces nearly three-quarters of Morningstar’s large growth fund category, and also beats the S&P 500 benchmark.
More recently, a 9.08% return for the trailing three months through November 3 bests 94% of its category. And its 6.5% return for one month through October 27 outpaced all the domestic stock funds in the Moneyletter list.
Fidelity Focused Stock can hold up to 80 stocks, but DuFour targets 40 to 60 holdings, and most often about half the maximum (39 issues in the portfolio as of September 30). Given the “focused” portfolio, it’s not surprising that the top ten holdings account for 47% of assets.
Stock selection is driven by research and bottom-up fundamental analysis. DuFour looks for firms that will grow earnings marginally faster than the market and that sell at attractive valuations, i.e. growth at a reasonable price (GARP). He notes that the fund adapts to changing market conditions.
DuFour does not target sector weightings. Technology is the largest sector in the portfolio as of September 30, at 40.1% of assets. That is a significant overweight compared to the S&P 500. Growth in electronic payments is one of three themes in the fund. The others are the internet (especially artificial intelligence or AI) and the rising popularity of ETFs.
Meanwhile, the fund’s health care exposure has increased from just over 8% in October 2016 to 15.2% as of September 2017 as DuFour took advantage of attractive opportunities combined with worries that the Affordable Care Act would be repealed.
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