When I look for actively managed mutual funds from Fidelity, I focus on those with strong management teams, consistent performance records, and clear strategies that justify active oversight. Fidelity is well-known for its wide range of actively managed funds, and many have delivered above-average returns by capitalizing on market inefficiencies and timely asset allocation.
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Why Choose Actively Managed Funds from Fidelity?
I choose actively managed funds for investors who want professional expertise to navigate complex markets. Unlike passive index funds, active managers seek to outperform benchmarks by selecting securities, adjusting sector weights, or timing market moves. Fidelity is known for its experienced analysts and portfolio managers, which can be a decisive advantage.
Active management can justify higher expense ratios if it leads to consistent alpha (excess returns). For US investors, active funds might help in niche sectors or volatile markets.
Criteria I Use to Select the Top Fidelity Active Funds
- Long-term outperformance vs benchmark (5- and 10-year annualized returns)
- Sharpe ratio: Risk-adjusted return indicator
- Expense ratio: Fees relative to category average
- Manager tenure and track record
- Consistency in performance across market cycles
- Fund size and liquidity
3 Best Actively Managed Fidelity Mutual Funds
| Fund Name | Category | 5-Year Return (%) | Expense Ratio (%) | Sharpe Ratio | Fund Size ($B) | Strategy Focus |
|---|---|---|---|---|---|---|
| Fidelity Contrafund (FCNTX) | Large Growth | 11.2 | 0.85 | 1.10 | 120 | Growth stocks with large-cap bias |
| Fidelity Blue Chip Growth Fund (FBGRX) | Large Growth | 10.8 | 0.79 | 1.05 | 50 | Blue-chip companies with growth potential |
| Fidelity Low-Priced Stock Fund (FLPSX) | Small/Mid Growth | 12.5 | 0.80 | 1.20 | 20 | Undervalued small and mid-cap stocks |
1. Fidelity Contrafund (FCNTX)
This is Fidelity’s flagship actively managed large-cap growth fund. The manager looks for companies with strong earnings growth potential and invests mostly in large U.S. stocks.
- Investment style: Growth-oriented but with a focus on quality and durability.
- 5-year return: 11.2% annualized.
- Expense ratio: 0.85%, higher than index funds but reasonable for active management.
- Sharpe ratio: 1.10, indicating good risk-adjusted returns.
- Portfolio: Typically 60-70 stocks, including tech giants, consumer discretionary, and health care leaders.
Example: Growth of $100,000 over 5 years
FV = 100,000 \times (1 + 0.112)^{5} = 100,000 \times 1.69 = 169,000This shows nearly 69% growth before taxes and fees.
2. Fidelity Blue Chip Growth Fund (FBGRX)
This fund focuses on well-established large companies that have demonstrated growth and stability. The approach balances risk with upside potential by selecting blue-chip names with strong fundamentals.
- 5-year return: 10.8%.
- Expense ratio: 0.79%.
- Sharpe ratio: 1.05.
- Portfolio: Usually about 40-60 stocks in technology, financials, and consumer sectors.
Why I recommend it
Its large-cap bias provides stability, while active management tries to uncover growth opportunities even in mature companies.
3. Fidelity Low-Priced Stock Fund (FLPSX)
This fund invests in small and mid-cap stocks trading at lower prices relative to their fundamentals. The active managers look for undervalued opportunities with growth potential.
- 5-year return: 12.5% (highest among the three).
- Expense ratio: 0.80%.
- Sharpe ratio: 1.20.
- Portfolio: 80-120 stocks with a value-growth blend.
What makes it stand out
Smaller companies tend to have higher growth potential but also more risk. Active selection aims to reduce downside while capturing gains.
Comparing the Three Fidelity Active Funds
| Fund | 5-Year Return (%) | Expense Ratio (%) | Sharpe Ratio | Typical Holdings | Risk Level |
|---|---|---|---|---|---|
| FCNTX | 11.2 | 0.85 | 1.10 | 60-70 large growth stocks | Moderate-High |
| FBGRX | 10.8 | 0.79 | 1.05 | 40-60 blue-chip large caps | Moderate |
| FLPSX | 12.5 | 0.80 | 1.20 | 80-120 small/mid caps | High |
Evaluating Risk vs Reward Using Sharpe Ratio
The Sharpe ratio helps me understand how much return I get for the risk I take. It is calculated as:
Sharpe = \frac{E(R) - R_f}{\sigma}where E(R) is the expected return, R_f is the risk-free rate (often Treasury yields), and \sigma is the standard deviation of returns.
A higher Sharpe ratio means better risk-adjusted performance. Among these, FLPSX leads, indicating it has provided the best return per unit of risk over the past five years.
How Expense Ratios Impact Your Returns
Expense ratios reduce your net returns. For example, over 10 years, the difference between a 0.79% and 0.85% expense ratio might seem small but compounds.
Assuming a gross return of 11%, net returns after fees would be:
- FBGRX net return: 11% - 0.79% = 10.21%
- FCNTX net return: 11% - 0.85% = 10.15%
Over 10 years, $100,000 grows to:
- FBGRX: 100,000 \times (1 + 0.1021)^{10} = 100,000 \times 2.65 = 265,000
- FCNTX: 100,000 \times (1 + 0.1015)^{10} = 100,000 \times 2.63 = 263,000
Even slight fee differences compound noticeably.
Final Thoughts on Fidelity’s Actively Managed Funds
I believe actively managed funds like these are best for investors who want exposure to professional research and flexibility beyond index funds. Fidelity’s depth of talent and resources shine through in these top performers.
Choosing between them depends on your risk tolerance and investment horizon. If you want more growth and can accept volatility, FLPSX is compelling. For stability with growth, FCNTX and FBGRX fit well.
