The top five holdings in this fund are: Total System Services Inc (TSS. 3.93% of total assets); VeriSign Inc (VRSN, 3.62%); Roper Technologies Inc (ROP, 2.75%); Fiserv Inc (FISV, 2.43%); and WellCare Health Plans Inc (WCG, 2.22%).
Fidelity Growth Strategies Fund (FDEGX)
From Fidelity Monitor & Insight
Manager Jean Park came aboard Fidelity Growth Strategies Fund (FDEGX) six years ago. Relative to her Russell Midcap Growth benchmark (which she mimics only in terms of sector
weightings), her first three years were her best owing to superior stock-picking.
Among Fidelity’s mid-cap options, by far and away, the Harvard and Wharton-educated manager has the best absolute record—one that looks even better when viewed on a risk-adjusted basis. That’s important to us, especially in portfolio construction. So, it’s one of several reasons why Growth Strategies is held in both our Unique Opportunities and Growth Model portfolios. (Jean is also co-manager with Will Danoff on Fidelity VIP Contrafund (FDPFC)—a mainstay in our Annuity Growth & Income and Income models.)
In terms of investment strategy, Jean says her “focus is on owning higher-quality stocks with below average valuations … emphasizing companies with high relative free cash-flow.” In other words, Growth Strategies has a value component which, at times, has been a hindrance given the market’s appetite for growth—regardless of price. Nonetheless, stock picking improved last quarter, helping to drive Growth Strategies up 28.6% for the year-to-date. Patience and tweaking
the fund’s edges helped, including a tiny increase in tech, all while adhering to her discipline of holding mid- to large-cap stocks with sound fundamentals and whose shares are selling at a reasonable price.
We rate Growth Strategies Buy.
Jack Bowers, John M. Boyd and John Bonnanzio, Fidelity Monitor & Insight, www.fidelitymonitor.com, 800-397-3094, August 2019