Is Fidelity New Millennium (FMILX) A Strong Mutual Fund Pick Right Now?

If investors are looking at the All Cap Growth fund category, Fidelity New Millennium FMILX could be a potential option. FMILX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FMILX is part of the All Cap Growth category, which is a segment that boasts an array of other possible options. All Cap Growth mutual funds aim to invest in various equity securities, regardless of company size that exhibit growth characteristics. These portfolios have holdings across the cap levels-- small, medium and large-cap-- in order to increase diversification throughout the fund.

History of Fund/Manager

FMILX finds itself in the Fidelity family, based out of Boston, MA. Fidelity New Millennium made its debut in December of 1992, and since then, FMILX has accumulated about $3.29 billion in assets, per the most up-to-date date available. The fund's current manager, John D. Roth, has been in charge of the fund since July of 2006.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. FMILX has a 5-year annualized total return of 14.41% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.14%, which places it in the middle 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. The standard deviation of FMILX over the past three years is 10.74% compared to the category average of 12.28%. The standard deviation of the fund over the past 5 years is 10.21% compared to the category average of 11.03%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. FMILX lost 52.14% in the most recent bear market and underperformed comparable funds by 0.92%. This could mean that the fund is a worse choice than comparable funds during a bear market.

Even still, the fund has a 5-year beta of 1, so investors should note that it is hypothetically as volatile as the market at large. 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. FMILX has generated a negative alpha over the past five years of -1.1, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

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, FMILX is a no load fund. It has an expense ratio of 0.53% compared to the category average of 1.11%. From a cost perspective, FMILX is actually cheaper than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity New Millennium has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund 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 All Cap Growth, 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.