If you've been stuck searching for Allocation Balanced funds, consider Fidelity Four Investor One Index Fund (FFNOX) as a possibility. FFNOX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FFNOX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
FFNOX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Four Investor One Index Fund made its debut in July of 1999 and FFNOX has managed to accumulate roughly $5.84 billion in assets, as of the most recently available information. The fund's current manager, Andrew Dierdorf, has been in charge of the fund since January of 2009.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 7.25%, and it sits in the top 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 10.65%, which places it in the top third during this time-frame.
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, FFNOX's standard deviation comes in at 9.27%, compared to the category average of -36.4%. Looking at the past 5 years, the fund's standard deviation is 9.47% compared to the category average of -0.09%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, FFNOX lost 45.89% and outperformed its peer group by 10%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.82, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -1.75, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FFNOX is a no load fund. It has an expense ratio of 0.08% compared to the category average of -45.89%. Looking at the fund from a cost perspective, FFNOX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Four Investor One Index Fund ( FFNOX ) has a high Zacks Mutual Fund rank, strong performance, worse downside risk, and higher fees compared to its peers.
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 are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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