This Fidelity growth fund is one of the best in the biz. Here's what it's loading up on

Published Thu, Aug 18 20229:47 PM EDT

The Fidelity Growth Company fund has had an outstanding decade. Independent mutual fund rating company Morningstar, which gives it a five-star rating, says it is one of the best performing funds over the past 10 years. The fund has $45.4 billion in assets under management and invests in domestic and foreign companies the advisor believes have above-average growth potential. Ranked in the first percentile by Morningstar, Fidelity Growth had a 10-year annual total return of 18.10%, far above the "large growth" category's average 13.6%. In that period, Fidelity Growth Company saw its highest annual return, 67.7%, in 2020. So far in 2022, the fund is down almost 21%, through Wednesday. "That underperformance, while disappointing, is mostly in line with what investors should expect from the strategy, given its style, typical exposure to companies with high volatility, and an unfavorable macroeconomic backdrop," Morningstar strategist Robby Greengold wrote in May. Growth-oriented stocks had a rough first half of the year. But the equity market has risen from its June lows, buoyed by investors keeping a watchful eye on inflation data and the Federal Reserve . The Fidelity Growth Company fund's manager, Steve Wymer, is "one of the best" and his strategy has kept the fund consistently ahead of its peers, Greengold said. That performance has earned a gold analyst rating from Morningstar. The Fidelity fund's top holding is Apple , which made up 11% of the portfolio at the end of June, followed by Nvidia , Microsoft , Amazon and Alphabet . Apple, which has been in the fund since 2004, is slightly down for the year but has seen gains of about 35% since its June 16 low. Nvidia, which makes up 6.92% of the portfolio, is down more than 36% for the year, and Microsoft, which accounts for 6.42% of the fund, lost almost 14% so far this year. Meanwhile, the two most recent additions to the fund are Growthco AB Holdings LLC, making up 0.32% of the portfolio, and Sysco, 0.22%, according to Morningstar. The fund has increased its position in several names as of June 30. The holdings that had the biggest share gains still made up a small fraction of the portfolio. The biggest increase came in shares of UnitedHealth , with the fund raising the number of shares held by 83%. The health insurer now makes up 0.53% of the fund's portfolio. The number of Accenture shares increased by 58% and the Procter & Gamble position grew by 44%, with each making up less than 0.25% of the portfolio. Meanwhile, the fund's holdings of EOG Resources went up by 28.1% and the number of TJX shares increased 8.9%, Morningstar found. Of the 10 largest positions held by the fund, only Visa shares grew slightly in the latest quarter, by 0.22%. The credit card company makes up 1.13% of the portfolio. Fidelity Growth Company's fee level is above average and it has an expense ratio of 0.73%, according to Morningstar.