Is Fidelity Magellan (FMAGX) a Strong Mutual Fund Pick Right Now?
FMAGX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
Fidelity is responsible for FMAGX, and the company is based out of Boston, MA. The Fidelity Magellan made its debut in May of 1963 and FMAGX has managed to accumulate roughly $27.08 billion in assets, as of the most recently available information. Sammy Simnegar is the fund's current manager and has held that role since February of 2019.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 14.96%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 17.83%, 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. Over the past three years, FMAGX's standard deviation comes in at 18.59%, compared to the category average of 16.7%. Looking at the past 5 years, the fund's standard deviation is 18.56% compared to the category average of 16.77%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.09, so it is likely going to be more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. FMAGX has generated a negative alpha over the past five years of -1.6, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
The mutual fund currently has 83.92% of its holdings in stocks, which have an average market capitalization of $455.20 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Industrial Cyclical
Finance
This fund's turnover is about 55%, so the fund managers are making more trades in a given year than the category average.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FMAGX is a no load fund. It has an expense ratio of 0.57% compared to the category average of 0.94%. Looking at the fund from a cost perspective, FMAGX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Overall, Fidelity Magellan ( FMAGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Large Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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