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

If you've been stuck searching for Allocation Balanced funds, consider Fidelity Asset Manager 50% (FASMX) as a possibility. FASMX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

FASMX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors are able to get a good head start with diversified mutual funds, and play around with core holding options for a portfolio of funds. Allocation Balanced funds look to invest across 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.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FASMX. Fidelity Asset Manager 50% debuted in December of 1988. Since then, FASMX has accumulated assets of about $7.74 billion, according to the most recently available information. The fund's current manager, Avishek Hazrachoudhury, has been in charge of the fund since April of 2018.

Performance

Investors naturally seek funds with strong performance. FASMX has a 5-year annualized total return of 6.18%, and it sits 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 12.69%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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, FASMX's standard deviation comes in at 8%, compared to the category average of 10.62%. Over the past 5 years, the standard deviation of the fund is 9.66% compared to the category average of 12.47%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.58, which means 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. The fund has produced a negative alpha over the past 5 years of -3.3, which shows that 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, FASMX is a no load fund. It has an expense ratio of 0.48% compared to the category average of 0.90%. Looking at the fund from a cost perspective, FASMX is actually cheaper than its peers.

While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Asset Manager 50% ( FASMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Fidelity Asset Manager 50% ( FASMX ) looks like a good potential 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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This article originally published on Zacks Investment Research (zacks.com).

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