Portfolio manager Will Danoff, who oversees $110 billion in Fidelity Investments' Contrafund, warned that "elevated valuations" were lurking in the high-growth sector of the stock market, causing more risk for investors.
"We are growing more selective in the high-growth parts of the market, where we see more risk due to elevated valuations," Danoff said in a commentary letter for the second quarter.
Read MoreFed slaps stocks with unusually targeted comments on valuation froth
Contrafund said it continued to trim its position in discount retailer TJX on valuation concerns, but remained overweight in the stock.
Meanwhile, Danoff said Facebook remained one of Contrafund's largest overweight positions as he sees more opportunity for the social media giant to monetize its massive user base.
—By Reuters