Once high-flying Fidelity fund loses altitude

Your Money

August 07, 2005|By Andrew Leckey

Q. My son is encouraging me to buy shares of Fidelity Capital Appreciation Fund. Does it have a good reputation?

B.V., via the Internet

A. It got a big-time reputation from rising 51.68 percent in 2003. But it barely outperformed the Standard & Poor's 500 in 2004 and trails it slightly this year.

The $6.5 billion Fidelity Capital Appreciation Fund (FDCAX) rose 17.73 percent over the past 12 months to rank in the upper half of large-growth funds. Its three-year annualized return of 21.6 percent placed it in the top 3 percent of its peers.

"I personally have a `hold' rather than `buy' rating on this fund because I think that a market in which oil prices, inflation and the dollar are on the rise means an uphill battle for growth stocks," said Jack Bowers, editor of the independent Fidelity Monitor newsletter (www.fidelitymonitor.com) in Rocklin, Calif.

"There are going to be winners, but a lot of losers, too."

Andrew Leckey is a Tribune Media Services columnist. E-mail him at yourmoneytribune.com.

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