The Fidelity Growth Company fund has had an excellent decade. The independent rating company Morningstar, which gives it a five-star rating, says it is one of the best-performing funds of the past 10 years. The fund has $45.4 billion in assets under management and invests in domestic and foreign companies that the advisor believes have above-average growth potential. Ranked in the first percentile by Morningstar, Fidelity Growth had a 10-year total annual return of 18.10%, well above the “big growth” category average of 13.6%. During that period, Fidelity Growth Company saw its highest annual return, 67.7%, in 2020. So far in 2022, the fund is down nearly 21% through Wednesday. “That underperformance, while disappointing, is largely in line with what investors should expect from the strategy given its style, typical exposure to high-volatility companies and an unfavorable macroeconomic backdrop,” Morningstar strategist Robby Greengold wrote in May. Growth-oriented stocks had a difficult first half of the year. But the stock market has risen from its lows in June, buoyed by investors closely monitoring inflation data and the Federal Reserve. Fidelity Growth Company’s fund manager, Steve Wymer, is “one of the best” and his strategy has consistently kept the fund ahead of its competitors, Greengold said. That performance earned a Gold Analyst rating from Morningstar. The Fidelity fund’s top spot is Apple, which made up 11% of the portfolio at the end of June, followed by Nvidia, Microsoft, Amazon and Alphabet. Apple, which has been in the fund since 2004, has fallen slightly for the year, but has posted an increase of about 35% since the low of June 16. Nvidia, which accounts for 6.92% of the portfolio, is down more than 36% this year, and Microsoft, which accounts for 6.42% of the fund, has lost nearly 14% so far this year. Meanwhile, the two most recent additions to the fund are Growthco AB Holdings LLC, accounting for 0.32% of the portfolio, and Sysco, 0.22%, according to Morningstar. As of June 30, the fund increased its exposure to several names. The holdings with the largest equity gains still made up a small part of the portfolio. The biggest increase came in shares of UnitedHealth, with the fund increasing the number of shares by 83%. The health insurer now makes up 0.53% of the fund’s portfolio. The number of Accenture shares rose 58% and the Procter & Gamble position grew 44%, each representing less than 0.25% of the portfolio. Meanwhile, the fund’s EOG Resources holdings were up 28.1% and TJX shares were up 8.9%, Morningstar found. Of the fund’s 10 largest holdings, only Visa stocks grew slightly in the last quarter, at 0.22%. The credit card company makes up 1.13% of the portfolio. Fidelity Growth Company’s fee level is above average and has an expense ratio of 0.73%, according to Morningstar.
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