Is Fidelity Asset Manager 50% (FASMX) a Strong Mutual Fund Pick Right Now?

Any investors hoping to find an Allocation Balanced fund could think about starting with Fidelity Asset Manager 50% FASMX. FASMX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FASMX 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

Fidelity is based in Boston, MA, and is the manager of FASMX. Since Fidelity Asset Manager 50% made its debut in December of 1988, FASMX has garnered more than $9.06 billion in assets. The fund is currently managed by Geoffrey Stein who has been in charge of the fund since June of 2009.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 7.78%, 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 7.45%, 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. Compared to the category average of 8.34%, the standard deviation of FASMX over the past three years is 5.73%. The standard deviation of the fund over the past 5 years is 5.57% compared to the category average of 8.13%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, FASMX lost 34.81% and outperformed its peer group by 1.32%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Even still, the fund has a 5-year beta of 0.53, so investors should note that it is hypothetically less volatile than 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. Over the past 5 years, the fund has a negative alpha of -0.57. This means that 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, FASMX is a no load fund. It has an expense ratio of 0.64% compared to the category average of 0.84%. FASMX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $2,500, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Asset Manager 50% has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Fidelity Asset Manager 50% looks like a somewhat average choice for investors right now.

This could just be the start of your research on FASMX in the Allocation Balanced category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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