The top morningstar mutual fund performance rating is ________

ASSIGNMENT 1: STOCK INVESTMENT ANALYSIS 2

ASSIGNMENT 1: STOCK INVESTMENT ANALYSIS 3

Assignment 1: Stock Investment Analysis

NAME

University

Financial Risk Analysis

Professor

February 9, 2015

Running head: ASSIGNMENT 1: STOCK INVESTMENT ANALYSIS 1

Assignment 1: Stock Investment Analysis

{Fidelity Large Cap Stock Fund is an expanded residential value procedure with an expansive top center introduction. This venture methodology discovers organizations that expect to have alluring income and profit yield potential through the following subsequent years. These organizations expect that our perspective is not the same as a business agreement. Securities can get to be mispriced with respect to their actual long haul esteem when financial specialists get to be progressively centered on the short term, and this procedure looks to adventure these disparities to drive execution and uncovers these organizations through central examination, working together with Fidelity's worldwide exploration group.}

INTRODUCTION STARTS HERE!! This assignment is about the stock investment analysis of the Fidelity Large Cap Stock Fund (FLCSX). FLCSX is a ________ that profoundly invests in market capitalization of large companies. In this assignment, I will assess the year-to-date performance or the FLCSX fund and evaluate the volatility risks in the fund. I will also compare my own assessments of the funds performance with Morningstar’s ratings, and assess the top ten holdings in the fund. _______NEED another sentence____________.

FLCSX Fund’s Year-to-Date Performance

{The fund's deficit of the S&P 500 Index of the fourth quarter was because of the some sectors like energy sector together with health care, as well as security assortment in financials. The fund has overweight when it comes to energy, and this hurts since is critical to the performance of any economy. In addition, stock assumed the largest positions of those that did not perform well, together with two heavyweights of this segment which are: Suncor Energy, Canada's leading energy company and the BG Group which is based in the United Kingdom.

Both of them tripped all through the period, as an abrupt recoil in oil prices which shot up in November following the decision of Organization of the Petroleum Exporting Countries (OPEC) to uphold present manufacture levels since the market was already inundated. The supply and demand schedules in this oil market will finally change to sustain the cost of petroleum, although the duration is not known.}

{The table below shows fund inceptions as of January 2015, together with the rank in the morning star category of the first year, third year, the fifth year, tenth year to life. This is a comparison of performance based on analysis of two companies; S&P 500 and Morningstar Inc.}

Years

1

3

5

10

Life

S&P 500

14.22%

17.47%

15.60%

7.61%

8.79%

Morningstar Category

84%

8%

10.00%

7%

--

Total Funds in Morningstar Category

1567

1334

1194

811

--

******In the above paragraphs, you never actually assed the YTD performance. There should be a YTD average of sometime within 2014 and a YTD as of January 2015. The drivers are what make up the top 80%. There should be other comparisons than just stock yields.********

REAL PARAAGRAPH STARTS HERE!!

Assess the year-to-date performance of the FLCSX fund =

· Key drivers of the fund performance =

· First key driver (Information Technology) =

· Second key driver (Financials) =

· Third key driver (Industrials) =

· Forth key driver (Health Care) =

· Fifth key driver (Consumer Staples) =

· How does the performance of the fund compare to the S&P 500 =

Risk

{Securities and stock markets, particularly foreign, are unstable and can decrease altogether because of unfriendly guarantor, political, administrative, market, or monetary improvements. Foreign stocks are liable to investment rate, cash swapping scale, financial, and political dangers. Overseas securities are subject to interest rate, currency exchange rate, economic, and political risks. This risk would ultimately affect returns depending on how much risk they pose to the investment. Thus, the greater the risk, the greater the cost of investment.}

REAL PARAGRAPH STARTS HERE!!

Evaluate the volatility risks in the fund =

· What are the volatility risks of this fund? = {Please provide your answer to this question here}

· First volatility risk = {Name of risk}. {Evaluate this risk}

· Second volatility risk = {Name of risk}. {Evaluate this risk}

· Third volatility risk = {Name of risk}. {Evaluate this risk}

· Forth volatility risk = {Name of risk}. {Evaluate this risk}

· What are the risk measurements of the fund?

· First risk measurement (Beta) (Performance and Risk TAB) = The current beta measurement is {provide number}. {A beta factor of above or below 1.0 indicates oscillation above or below the standard index of 1.0 (Petajisto, 2013). Beta is most active in measurement of volatility when combined with a high R2 that indicates a high correlation between change in returns and change in the standard index (1.0).}

· Second risk measurement (R2) (Performance and Risk TAB) = The current correlation measurement is 0.93. {This is an appraisal of the correlates of performance of the funds and standard index (Petajisto, 2013). The lower the R2, the more the funds’ performance is affected by auxiliary factors other than the market as measured by the standard index.}

· Third risk measurement (Sharpe Ratio) (Performance and Risk TAB) = The current ratio is 1.65. {Provide what is sharpe ratio and why is it a risk measurement.}

· Forth risk measurement (Standard Deviation) (Performance and Risk TAB) = The current standard deviation is 10.84. {This is the statistical measure of variation of returns in a given length of time (Petajisto, 2013). A higher standard deviation indicates greater variation in return thus higher level of volatility.}

· Provide an assessment of the fund manager’s performance based on the risk measurements of the fund. = {Please provide an answer to this task.}

· Make a recommendation to the fund manager for improving the performance. = {Please provide an answer to this task.}

Rating Agreement or Disagreement

REAL PARAGRAPH STARTS HERE!!

· What is your assessment of the funds performance? = {Please provide your assessment here.}

· What is Morningstar’s assessment of the fund’s performance rating? (Ratings TAB) = Morningstar’s rating is five stars. Why is it five star? = {Please provide why the rating is five star.}

· Do you agree or disagree with the rating? = {Please provide your answer with SUPPORT.}

· Provide support for your position.

Top 10 Holdings

Assess the top 10 holdings in the fund =

· What is the level of diversification in the fund? = {Please provide the level of diversification.} {The level of diversity is not proportionate to the ranking of the companies, but it is clear they have all diversified and operate across different countries in the world that contribute to their profits.}

· Identify a company that may impose increased risk. = {Please provide a company that may impose risk here.}

· What are those increased risks? = {Please provide an answer.}

· What changes would you recommend in the fund composition to improve the fund performance? = {Please provide an answer with SUPPORT.}

· Provide support for your rationale.

Conclusion

{Please provide a conclusion here.}

Reference:

Petajisto, A. (2013). Active share and mutual fund performance. Financial Analysts Journal, 69(4), 73-93.