Is FOCPX worth the expense ratio? Is there a better mutual fund, or am I better off just going with FBGRX and ARKK?
The Fidelity Blue Chip Growth Fund (FBGRX) is a mutual fund designed to provide growth potential for investors. Some of the companies that the fund invests in include Facebook, Amazon, and Google.
Fidelity OTC Portfolio (FOCPX) invests in stocks traded on the NASDAQ Composite Index or over-the-counter market. The mutual fund has over 25% of its total assets invested in the technology sector.
Both of these mutual funds are notorious for their high expense ratios. Fidelity OTC Portfolio charges 0.80%, while Fidelity Blue Chip Growth Fund charges 0.79% per year to cover all expenses related to the operation.
While there may be some overlapping in the top holdings, FOCPX tends to have more small and medium-sized companies than FBGRX because a lot of their stocks are on the OTC market. FBGRX mainly invests in medium to large-cap stocks.
FBGRX Top 10 Holdings
|COMPANY||SYMBOL||TOTAL NET ASSETS|
|Alphabet Inc. Cl A||GOOGL||6.18%|
|Meta Platforms Inc.||FB||3.87%|
|Marvell Technology Inc.||MRVL||2.77%|
FOCPX Top 10 Holdings
|COMPANY||SYMBOL||TOTAL NET ASSETS|
|Alphabet Inc. Cl A||GOOGL||8.97%|
|Meta Platforms Inc.||FB||3.70%|
|Alphabet Inc. Cl C||GOOG||2.88%|
|Marvell Technology Inc.||MRVL||2.28%|
|Reliance Industries Ltd ORD||1.91%|
As of 11/30/2021
FOCPX pays dividends semiannually. The dividend that the fund pays out is close to nothing.
The Fidelity Blue Chip Growth Fund also has the same dividend schedule. Moreover, the dividend amount is also very small.
|Funds||Fidelity® OTC Portfolio||Fidelity® Blue Chip Growth Fund|
When comparing the performance of the past five years, FBGRX has done better than FOCPX (in total return). But if you zoom out to 10 years, their returns are identical.
The expense ratio is not the deciding factor here. FBGRX is as expensive as its counterpart.
The turnover rate of FBGRX is a lot higher than FOCPX (by more than 10%). Turnover rate is how often the fund manager replaces the holdings in its portfolio. The lower the rate, the better.
If you don’t mind the exposure to tech stocks and over-the-market companies, FOCPX is great. But, if you would prefer to stick with medium to large-cap stocks, FBGRX is a better candidate.
I have about 25% of my portfolio is in FOCPX. Expense ratio higher in FOCPX but not enough to sacrifice its gains. Better off staying where you are.
I’m in both FBGRX and FOCPX. I think they are worth it so far, then again i don’t have much in since i have only been investing for a few years.
Neither of them are good for in taxable account due to their high turnover ratio. I would only invest in FBGRX or FOCPX in an IRA account. I have both CPOAX and MACGX and very pleased with them. Fidelity waived the fees which makes it worthwhile.
Does anyone know an alternative to FOCPX that has a lower Expense Ratio. 0.87% seems awful high. It has been one of my top earners.
FTEC or ONEQ carry similar NASDAQ exposure (although in larger caps). I think FOCPX seeks out a slight advantage over ONEQ even with a higher expense ratio. FTEC is a more tech-centric exposure to the NASDAQ but outperforms FOCPX with a lower expense ratio.
If you want to retain Consumer discretionary and Communication Services, you could build your own portfolio with FTEC, FDIS, and FCOM (all of which are very low fees and very good performers).
The goal is to net the highest return, not pay the lowest fees. FOCPX has returned almost 15% per year on average since its inception in 1984, so it has outperformed the S&P 500.