Having trouble finding an Allocation Balanced fund? Fidelity Asset Manager 40% (FFANX) is a potential starting point. FFANX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Zacks’ Allocation Balanced funds is an area filled with options, such as FFANX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
FFANX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Asset Manager 40% debuted in October of 2007. Since then, FFANX has accumulated assets of about $1.50 billion, according to the most recently available information. Avishek Hazrachoudhury is the fund’s current manager and has held that role since April of 2018.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 5.28%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 0.99%, which places it in the middle third during this time-frame.
It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 13.56%, the standard deviation of FFANX over the past three years is 9.79%. The standard deviation of the fund over the past 5 years is 9.74% compared to the category average of 14.33%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.51, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a negative alpha of -3.34. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FFANX is a no load fund. It has an expense ratio of 0.51% compared to the category average of 0.90%. Looking at the fund from a cost perspective, FFANX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Fidelity Asset Manager 40% ( FFANX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Asset Manager 40% ( FFANX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Allocation Balanced, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (FFANX): Fund Analysis Report