Stock investment analysis

Stock investment analysis

FLCSX

Year-to-date

The year to date performance of the index is 11.31% while S&P 500 had shown a return of 12.74. It seems quite obvious from the figures that FLCSX is following the S&P 500

The fund manages Matthew states that the myopic view of the investors had lead to several advantages for the fund. The fund manager believes that keeping a long term position in the stock market can yield several benefits for the investors. The analysis is conducted after deeply looking for the signals which have directed to keep a long-term position in the stock market. The target horizon set by the investor is 3-4 years. The research has provided the fund manager an edge to keep a heavy position in the market by the funds recent turmoil. Through the research Matthew was able to develop a position by keeping a position in those banks which are actively following the regulatory requirements strictly while maintaining a strong edge in the portfolio. The financial sector has been amongst those sectors which are actively performing in the market (Fidelity, 2013).

The Performance of the fund with respect to S&P 500.

The ten year performance explains that the fund is capable to catch up with the S&P 500 index. The fund is trailing S&P 500 through the tenures. However the volume is lower which can be attributed to diverse funding strategies of the funds which are yielding different returns

Source: MorningStar

Portfolio manager Matthew Fruhan focuses on earnings growth to manage this fund, and he divides his investment universe into either secular or cyclical growth opportunities. Stability and predictability typically characterize the former, and Fruhan likes to buy them after short-term hiccups or when the consensus view seems to underappreciate their long-term growth stories. Cyclical growers tend to have more economically sensitive earnings, and Fruhan tries to buy them when their profit margins are close to historic troughs. He tends to exercise patience to allow these earnings stories to play out; the fund's 64% turnover is lower than most actively managed large-blend funds (Fidelity, 2013).

While he keeps the portfolio roughly evenly divided between the two buckets, the weightings will tilt toward one side or the other depending on the opportunities that he finds with his bottom-up research. Fruhan doesn't think in terms of value versus growth, but this tilting has resulted in de facto rotations between the two styles. His large allowance for deviations from the S&P 500 Index's sector weights facilitates this style rotation. Fidelity has lately been reining in those sorts of risk for many of its strategies, but this fund has maintained the relatively flexible nature characteristic of many of the firm's strongest offerings. Meanwhile, Fruhan generally keeps the fund fully invested.

Fruhan's tendency to tilt the portfolio toward either secular or cyclical growers roughly corresponds to tilts between growth and value styles, respectively. After finding secular growers attractive for much of 2010 and 2011, Fruhan has lately been moving gradually back toward cyclical stocks, which is reflected in an increasing ...