The exceptional skill of Fidelity Contrafund’s FCNTX portfolio manager outweighs the disadvantages of its massive asset base, and its sizable position in Meta Platforms META has helped it recently.
Will Danoff has successfully steered this diversified stock fund through multiple market cycles, including recent ones. The fund’s roughly 13% annualized gain over the past decade beat the S&P 500 (the fund’s broad-market prospectus benchmark) and ranked among the best-performing third of funds in either the large-blend or large-growth Morningstar Categories. It’s a particularly impressive feat given the colossal combined asset base of more than $200 billion across all of Danoff’s funds, which has long limited their flexibility.
Granted, favorable market conditions recently have kept the funds from getting bogged down. Giant companies such as those featured in this portfolio have trounced smaller ones. In an environment where those roles are reversed, this fund’s results may look more pedestrian. Even so, Danoff’s stock-picking has proved to be an advantage.
Danoff looks for best-of-breed companies with competitive advantages, improving earnings potential, and capable leadership. He is particularly fond of founder-led firms. So, it is unsurprising to see him express high conviction in Meta, which this portfolio has held since before its 2012 debut as a public company, then called Facebook.
The stock has come to define the portfolio. Through its outperformance, the stock’s share of the portfolio reached more than 12% of assets as of year-end 2023. That’s a huge position size relative to the stock’s 2%-4% share of relevant large-blend and large-growth indexes; it topped the Meta stakes of all other U.S.-sold funds aside from sector funds, and it marked this fund’s largest stake since at least the turn of the century. The stock has recently been highly volatile. But in early February 2024, Morningstar’s equity research team saw the stock as reasonably valued and assigned it a wide Morningstar Economic Moat Rating—which suggests strong competitive footing—and an Exemplary Morningstar Capital Allocation Rating for its sound balance sheet and its management’s exceptional investment decision-making.
These features might temper the stock’s risks. Danoff also sensibly offsets them with the portfolio’s second-largest holding, Berkshire Hathaway BRK.A, which, other than its own favorable ratings by Morningstar’s equity research team, has little in common with Meta.
Fidelity Contrafund: Performance Highlights
The fund has a phenomenal long-term record under Danoff, who has managed it since September 1990.
During his tenure, the fund’s oldest class gained 13.3% annualized through December 2023, beating the 10.7% gain of the S&P 500 (its broad-market prospectus benchmark) and the 11.1% gain of the Russell 1000 Growth Index (the large-growth category index). Its total return exceeded nearly all surviving large-cap funds.
But following an 18-year hot streak that saw the fund routinely and substantially outpace its benchmarks, its relative results began to cool in 2009, shortly after its asset base ballooned to become one of the world’s largest U.S.-centric strategies. Since then, the margins of its outperformance versus peers and the S&P 500 have slimmed. It has consistently lagged the growth index, which is a relevant benchmark given the fund’s performance patterns, emphasis on high-growth stocks, and investment philosophy. Danoff has kept ahead of his large-growth peers, though, which is a testament to his skill.
The fund’s emphasis on large firms with diverse business lines and competitive advantages has helped it show some resilience in down markets. That includes 2020′s pandemic-driven bear market (when the fund dropped 29.4% and the growth index plunged 31.5%) and calendar-year 2022 (when the fund lost 28.3% versus the index’s 29.1% decline).
The author or authors own shares in one or more securities mentioned in this article.Find out about Morningstar’s editorial policies.
Overall Rating. Morningstar has awarded this fund 4 stars based on its risk-adjusted performance compared to the 1100 funds within its Morningstar Category.
Currently there's no upside potential for FCNTX, based on the analysts' average price target. Is FCNTX a Buy, Sell or Hold? Fidelity Contra Fund has a consensus rating of Moderate Buy which is based on 254 buy ratings, 48 hold ratings and 1 sell ratings. What is Fidelity Contra Fund's price target?
The fund's roughly 13% annualized gain over the past decade beat the S&P 500 (the fund's broad-market prospectus benchmark) and ranked among the best-performing third of funds in either the large-blend or large-growth Morningstar Categories.
Shares of the fund are only available for purchase by mutual funds for which FMR or an affiliate serves as investment manager. This fund is closed to new investors.
The fund has returned 22.90 percent over the past year, 7.30 percent over the past three years, 12.06 percent over the past five years and 12.09 percent over the past decade.
Fidelity® Contrafund® is an opportunistic, diversified equity strategy with a large-cap growth bias. Philosophically, we believe stock prices follow companies' earnings, and those companies that can deliver durable multiyear earnings growth provide attractive investment opportunities.
Last dividend for Fidelity Contra Fund (FCNTX) as of June 8, 2024 is 0.08 USD. The forward dividend yield for FCNTX as of June 8, 2024 is 0.39%. Average dividend growth rate for stock Fidelity Contra Fund (FCNTX) for past three years is -17.24%.
Fidelity Contrafund K6 (FLCNX) has a higher volatility of 2.76% compared to Vanguard Total Stock Market ETF (VTI) at 2.49%. This indicates that FLCNX's price experiences larger fluctuations and is considered to be riskier than VTI based on this measure.
The largest Fidelity ETF is the Fidelity MSCI Information Technology Index ETF FTEC with $10.89B in assets. In the last trailing year, the best-performing Fidelity ETF was FDIG at 76.06%. The most recent ETF launched in the Fidelity space was the Fidelity Yield Enhanced Equity ETF FYEE on 04/11/24.
On average, the Fidelity Contrafund has beaten the S&P 500 Index by 2.78% per year. Growth of $10,000 invested in Contrafund versus S&P 500 Index, September 17, 1990 to March 31, 2024. Total value March 31, 2024 for Contrafund was $751,828 compared to $327,447 for the S&P 500 Index.
The Securities Investor Protection Corporation (SIPC) is a nonprofit organization that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt and assets are missing. The SIPC will cover up to $500,000 in securities, including a $250,000 limit for cash held in a brokerage account.
If you have been looking for Large Cap Growth funds, a place to start could be Fidelity Contrafund K (FCNKX). FCNKX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
With our Customer Protection Guarantee, we reimburse you for losses from unauthorized activity in your accounts. We also participate in asset protection programs such as FDIC and SIPC to help provide the best service possible.
The average price target for Fidelity Contrafund K6 is $31.67. This is based on 305 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $36.68 ,the lowest forecast is $26.08.
All Fidelity brokerage accounts are covered by SIPC. This includes money market funds held in a brokerage account since they are considered securities. Learn more about SIPC coverage at www.sipc.orgOpens in a new window.
Around 69% and 100% of value and contra mutual funds respectively outperformed benchmarks in the last three years, driven by market recovery and strategic stock selection, as per ETMutualFunds and experts like Abhishek Jain from Arihant Capital.
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