Morningstar Magazine - December 2017/January 2018 - 55

Strategies

Consistently Opportunistic
Fidelity Mid-Cap Stock has held its edge as it has grown,
aided by low fees and a sound process.
BEST IDEAS: MANAGER

Katie Rushkewicz Reichart

Fidelity Mid-Cap Stock FMCSX

This article is adapted from the fund's Morningstar Global Fund Report dated
Oct. 16, 2017.

Stats 10/31/2017

The opportunistic process of Fidelity Mid-Cap Stock FMCSX maintains an edge,
earning it a Morningstar Analyst Rating of Bronze.
The fund, led by John Roth since early 2011, added resources in July when
Nicola Stafford was named comanager. She started as a portfolio assistant on
the fund in mid-2016 after rejoining Boston-based Fidelity from its separate
international affiliate. So far, she's helped with subsector deep dives and
idea generation, but her influence remains to be seen. Stafford's background
is in consumer stocks, but the funds she has run were mostly large cap
rather than mid-cap-oriented. Meanwhile, Morningstar Attribution shows that
consumer discretionary has been one of Roth's strongest sectors from
a stock-picking standpoint during his tenure here.

Roth's history of investing in mid-cap stocks dates back to his 2006 start
at all-cap fund Fidelity New Millennium FMILX, where he's turned in
strong results using a similar process. Mid-Cap Stock has handily outpaced its
mid-growth category peers on his watch but has lagged its benchmark
by a tad. It's also maintained a decent risk profile during Roth's tenure, and
expenses remain reasonable. K
Katie Rushkewicz Reichart, CFA, is associate director, equity strategies with
Morningstar Research Services.

Morningstar Category
Mid-Cap Growth

Expense Ratio
0.58%

Fee Level
Low

5-Yr Annlzd Return
14.37%

5-Yr % Rank in Cat
35

Morningstar Pillars 10/31/2017
Process
∞ Positive

Performance
¶ Neutral

People
∞ Positive

Parent
∞ Positive

Price
∞ Positive

Growth of 10K 10/31/2017

$14K
13.03
13.03
12

Fidelity Mid-Cap Stock

Even so, it's not bad for Roth to have more resources. The assets he manages
increased significantly in 2013 when he became a comanager on Fidelity
Advisor New Insights FNIAX. Mid-Cap Stock's $8 billion asset base makes it
one of the bigger actively managed mid-cap funds open to new investors.

10

Morningstar US Mid Growth TR

8
10/2012

10/2013

10/2014

10/2015

Morningstar Style Box 9/30/2017
Micro Small Mid Large Giant

The process at this fund remains consistent. Roth blends growth picks with
out-of-favor cyclicals, using the core-oriented S&P MidCap 400 Index as its
benchmark. The fund was more growth-oriented early in his tenure but
has edged closer to the blend border of the Morningstar Style Box in the past
two years as energy exposure grew. (Category assignments are based
on three years of portfolio data.) That bet has weighed on returns at times,
including 2015, but provided a tailwind-particularly relative to mid-growth
Morningstar Category peers-in 2016.

Morningstar Analyst Rating
´

10/2016

Morningstar Ratings 10/31/2017

Fund Centroid
weighted avg. of Period
equity holdings
3-Yr

Mstar
Return

Mstar
Risk

Mstar
Rating

Average

Low

QQQ

Zone
75% of fund
equity holdings

5-Yr

Average

Below Avg QQQQ

10-Yr

Average

Above Avg QQQ
QQQ

Overall Rating

Deep Core Core Core High
Value Value
Grwth Grwth

Top 5 Sectors 9/30/2017

Sectors

■ Fund

y Financial Services

❙ Category Average

3-Yr. High 3-Yr. Low

12.25 19.60

19.60

16.96

18.60

16.03

16.84

15.57

16.39

13.88

9.88

9.44

p Industrials

16.03

a Technology

15.57
14.76

t Consumer Cyclical
d Healthcare

9.62

0%

18.02
21.28
16.56
15.27

10

20

30

40

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55
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Table of Contents for the Digital Edition of Morningstar Magazine - December 2017/January 2018
