Is Fidelity Dividend Growth Fund (FDGFX) a Strong Mutual Fund Pick Right Now?

Any investors hoping to find a Large Cap Blend fund could think about starting with Fidelity Dividend Growth Fund (FDGFX). FDGFX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

FDGFX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a ” buy and hold ” mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.

Fidelity is based in Boston, MA, and is the manager of FDGFX. The Fidelity Dividend Growth Fund made its debut in April of 1993 and FDGFX has managed to accumulate roughly $6.59 billion in assets, as of the most recently available information. Zachary Turner is the fund’s current manager and has held that role since July of 2020.

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 18.34%, and it sits in the middle 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 9.58%, which places it in the top 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 15.45%, the standard deviation of FDGFX over the past three years is 15.81%. The standard deviation of the fund over the past 5 years is 16.06% compared to the category average of 16.49%. This makes the fund less volatile than its peers over the past half-decade.

Investors should note that the fund has a 5-year beta of 0.91, so it is likely going to be less 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. FDGFX’s 5-year performance has produced a positive alpha of 1.13, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.