Investment Fidelity

04/28/2006 12:00 am EST

Focus:

Jim Lowell

Senior Partner & Chief Investment Strategist, Adviser Investments

If Fidelity funds are part of your strategy, attending a workshop by Jim Lowell should be at the top of your list. There is simply no advisor with more in-depth knowledge of this fund family. Here's a look at five of his favorite funds in the large-cap area.

"While I continue to like small-cap stocks, and for that matter, mid-cap stocks, too, I also think that large-cap stocks and the funds that hold 'em make considerable sense now and in any market environment. But, today there are some compelling themes which make large-cap stocks generally interesting and, with regard to specific sectors, particularly attractive.

"Of course, at any given time, the key to investing in any capitalization range's fund lineup is buying the manager, not the fund. Just like the companies they invest in, I'm looking at managers who have had significant experience managing through irrationally exuberant, demonstrably dire, and reasonably better times. I also favor managers who have an unwavering allegiance to their own investment discipline.

"I'm also looking for a particular type of fund. I prefer large-cap funds that are globally oriented. The marketplace is truly global; and large-cap managers need to think bigger than their own backyard. Second, I like to see significant weightings in two key areas of long-term growth: technology and healthcare.

"Finally, I keep my eye on the X-factor: Risk. Not all growth funds are created equal. Not all of my Buy-rated growth funds are suitable for every investment objective. As always, we need to be informed so that we can be selective; choosing the right funds to meet our particular risk tolerance and objective.

"Fidelity Contrafund (FCNTX) is a buy. Will Danoff continues to deliver his contrarian goods; but is lagging his benchmark S&P 500 index by a moderate amount this quarter. But cash levels around 9% could help buffer this fund from the likely mid-year blows while, at the same time, providing room to maneuver on the far side of fall. Investors should note that after April 30, new investors will be barred from the door. As a result, I'd urge those who do not currently have a stake in Contra to at least establish a toehold position (with a minimum investment $2,500).

"We also rate Fidelity Blue Chip Growth (FBGRX) a buy. Portfolio manager Brian Hanson, joined forces with John McDowell back in April 2005, leading to an upgrade in my recommendation of this fund. This month's upgrade to Buy reflects both my confidence in Hanson's ability and my interest in a pure play on large-cap growth names.

"Brian Hogan sticks to the value side of the market's large-cap fence at Fidelity Blue Chip Value (FBCVX) and continues to benefit from the global demand for energy, industrial, and material names. But a core strength is easily overlooked; Hogan has also benefited from his underweighting the main component of the value group: financials. His Russell 1000 Value benchmark's weighting in financials is over 36% (the next biggest weighting in the index is energy at 14%). Hogan's stake: 23%.

"Fidelity Growth Company (FDGRX) is a buy. Steve Wymer is a veteran growth stock picker who wasn't bucked from the bear market's bronco and who has been able to stay on top of the bull in the recent rally rodeo. Tech and healthcare rule the roost; almost exclusively so: a hallmark of Wymer is his two-sector concentration. He's in the right place. The right time? Only time will tell.

"Fidelity Large Cap Value (FSLVX) is a buy. New manager Bruce Dirk took over in February 2006, rising from the rank of analyst. Also a manager of other managers' best ideas, this is an ideal testing ground for Dirks' manager skills without putting shareholders at risk of a greenhorn trying to outsmart the market."

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