Full access to Entrepreneur for $5
Subscribe

Is Fidelity Strategic Dividend & Income (FSDIX) a Strong Mutual Fund Pick Right Now?

Mutual Fund Report for FSDIX

By
This story originally appeared on Zacks

If you've been stuck searching for Large Cap Blend funds, you might want to consider passing on by Fidelity Strategic Dividend & Income (FSDIX) as a possibility. FSDIX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

- Zacks

Objective

We note that FSDIX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.

History of Fund/Manager

Fidelity is responsible for FSDIX, and the company is based out of Boston, MA. Since Fidelity Strategic Dividend & Income made its debut in December of 2004, FSDIX has garnered more than $3.56 billion in assets. The fund's current manager is a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 10.82%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 12.89%, 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. Compared to the category average of 15.13%, the standard deviation of FSDIX over the past three years is 14.04%. Looking at the past 5 years, the fund's standard deviation is 11.33% compared to the category average of 12.45%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FSDIX has a 5-year beta of 0.73, which means it 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 -1.89, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FSDIX is a no load fund. It has an expense ratio of 0.69% compared to the category average of 0.95%. FSDIX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Strategic Dividend & Income ( FSDIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSDIX too 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.



Tech IPOs With Massive Profit Potential: Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative. 

See Zacks’ Hottest Tech IPOs Now >>



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

Get Your Free (FSDIX): Fund Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research