Fidelity Contrafund FCNTX Review: 20 Key Questions And Answers

Milan Kovacevic February 05, 2018

Is it difficult to find everything you need to know about Fidelity® Contrafund® (MUTF: FCNTX) in one place?  If so, you came to the right destination.  

In this Fidelity Contrafund review, we’ll address key questions our readers have been asking us about this Fund, beyond what you can find on FCNTX Morningstar and FCNTX US News pages.  We'll also address some of the popular questions asked on the FCNTX Bogleheads forum.  

FCNTX is the top Fidelity mutual fund measured by assets and is hugely popular among individual investors.  We'll first start with some basic questions you can typically find in the fact sheet, such as FCNTX holdings, 'stock' performance, dividend, expense ratio and minimum initial investment.  Then we'll compare and contrast FCNTX to other mutual funds and ETFs, such as FCNTX vs VTI, FCNTX vs VOO, FCNTX vs S&P 500FCNTX vs FLPSX, FCNTX vs FDGRX, FCNTX vs FOCPX, FCNTX vs FUSVX, FCNTX vs VFINX, and FCNTX vs VINIX.  

So let's get started. 

1. What is FCNTX?  What is its objective?

The Fund seeks capital appreciation, by investing in securities of companies whose value is not 'fully recognized' by the public.  The Fund normally invests primarily in common stocks and may invest in both domestic and foreign issuers.

2. Is FCNTX an active or a passive mutual fund?  What is the underlying index for FCNTX?

FCNTX is an actively managed mutual fund.  There is no underlying index for FCNTX. 

3. How many stocks does FCNTX have as its holdings?

FCNTX has 307 stocks as its holdings.  The top 10 holdings represent 36.82% of total FCNTX assets.  Here are the top holdings:

Name
Symbol
% Assets
Facebook Inc A
FB
7.3
Berkshire Hathaway Inc A
BRK.A
5.09
Amazon.com Inc
AMZN
4.38
Apple Inc
AAPL
3.52
Alphabet Inc A
GOOGL
3.49
Alphabet Inc C
GOOG
3.16
Microsoft Corp
MSFT
2.67
UnitedHealth Group Inc
UNH
2.59
Visa Inc Class A
V
2.47
Salesforce.com Inc
CRM
2.15

Visit Finbot and type "FCNTX holdings" to get an updated view on the top holdings for this fund. 

4. How did FCNTX perform historically?

FCNTX has generated the following returns:

  • 1-months return is 0.33%;
  • 3-months return is 6.75%;
  • 1-years return is 32.26%;
  • 3-years return is 13.33%;
  • 5-years return is 16.43%;

Visit Finbot and type "FCNTX return" to get the latest performance metrics for this fund. 

5. What is the minimum initial investment amount for FCNTX?

$2,500.

6. What is FCNTX dividend yield?

FCNTX yield is 0.09%.

7. Does FCNTX have any sales loads or 12b-1 distribution expenses?

FCNTX 12b-1 fee is 0, as well as its front-end sales load and back-end sales load.

Visit Finbot and type "FCNTX 12b-1" to view marketing and distribution fees (for this fund or any other mutual fund). 

8. How many up and down years did FCNTX have historically?

In the last 16 years, FCNTX had 38 up years and 12 down years.

9. What is FCNTX expense ratio?

FCNTX expense ratio is 0.68%. The expense ratio of a fund is the total percentage of fund assets used for administrative, management, and all other expenses.  

FCNTX expense ratio is below the average for mutual funds, but significantly above the expense ratio for passive index funds.

10. What is FCNTX tax efficiency (tax-cost ratio)?

FCNTX tax-cost ratio is 0.87%. The tax-cost ratio measures how much a fund’s annualized return is diminished by the taxes investors pay on distributions. Funds like FCNTX regularly distribute capital gains.

11. What is FCNTX beta? How would you assess FCNTX risk?

FCNTX 3-year beta is 0.89. 

Beta is a measure of the volatility, or systematic risk, of a fund in comparison to the market as a whole.  S&P 500 Beta is equal to 1. A Beta higher than 1 means riskier than the market overall; conversely, lower than 1 means less risky than the market.

12. What is FCNTX Sharpe ratio?

The 3-year Sharpe ratio for FCNTX is 1.25. The Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk. Generally, the greater the value of the Sharpe ratio, the more attractive the risk-adjusted return.

13. Compare and contrast: FCNTX vs VOO (or FCNTX vs S&P 500).

VOO is an ETF that tracks the performance of its benchmark index, the S&P 500, while FCNTX is an actively managed mutual fund.  

VOO attempts to replicate S&P 500 by investing all of its assets in the stocks that make up the Index with the same approximate weightings as the Index.  There are roughly 500 stocks in the S&P 500 index.  

Unlike mutual funds, ETFs trade like a stock, so you can't buy fractional shares. You can manually add a certain amount, but the exact amount will depend on the share price at that moment.

ETFs are more tax-efficient. You have more control over when a taxable event gets triggered. This is particularly useful in a taxable account.

Below is a comparison table for FCNTX and VOO/S&P 500.


VOO (S&P 500 ETF)
FCNTX
Security Type
ETF
Mutual fund
Segment
U.S. Equity: Large Cap
U.S. Equity: Large Growth
Net Assets
$86.96B
$90.15B
Expense Ratio
0.04%
0.68%
Management Style
passiveactive
Minimum Investment
N/A
$2,500
1-Year Return
21.77%
32.26%
3-Year Return
11.44%
13.33%
5-Year Return
15.78%
16.43%
1-Year Tax Cost Ratio
0.45%
0.87%

As you can see, VOO is a lot cheaper than FCNTX, and it doesn't require a minimum initial investment, but it generated lower risk-adjusted returns in the past. 

For the most current comparison between FCNTX and VOO, visit Finbot and type "FCNTX vs VOO".

14. Compare and contrast: FCNTX vs VTI.

VTI is an ETF that tracks the performance of a benchmark index measuring the investment return of the overall stock market, while FCNTX is a growth mutual fund that employs an active management style. 

VTI's underlying index is CRSP US Total Market Index.

FCNTX is a large-cap fund focused on growth, whereas VTI covers stocks of all market capitalizations.  FCNTX number of holdings is 307, while VTI invests in over 3,600 stocks.

Below is a comparison table for FCNTX and VTI.


VTI
FCNTX
Security Type
ETF
Mutual fund
Segment
U.S. Equity: All Cap
U.S. Equity: Large Growth
Net Assets
$94.67B
$90.15B
Expense Ratio
0.04%
0.68%
Management Style
passiveactive
Minimum Investment
N/A
$2,500
1-Year Return
21.21%
32.26%
3-Year Return
11.13%
13.33%
5-Year Return
15.57%
16.43%
1-Year Tax Cost Ratio
0.44%
0.87%

As you can see, FCNTX is significantly more expensive than VTI, but it also generated higher risk-adjusted returns historically.  

For the most current comparison between FCNTX and VTI, visit Finbot and type "FCNTX vs VTI".

15. Compare and contrast: FCNTX vs FLPSX.

FLPSX invests in mid-cap value companies, whereas FCNTX focuses on large-cap growth stocks

Both funds are actively managed.  FCNTX number of holdings is 307, while the equivalent number for FLPSX is 889.  

Fidelity Management & Research normally invests at least 65% of FLPSX assets in low-priced common stocks. Low-priced stocks are those that are priced at or below $35 per share at the time of the Fund's investment.

Below is a comparison table for FCNTX and FLPSX.


FCNTX
FLPSX
Segment
U.S. Equity: Large Growth
U.S. Equity: Mid-Cap Value
Net Assets
$90.15B
$30.33B
Expense Ratio
0.68%
0.67%
Management Style
active
active
Minimum Investment
$2,500
$2,500
1-Year Return
32.26%
20.67%
3-Year Return
13.33%
9.29%
5-Year Return
16.43%
13.55%
1-Year Tax Cost Ratio
0.87%
1.14%

As you can see, both funds are similarly priced, but their focus and performance are significantly different.  The Fidelity Contrafund generated significantly higher returns historically.

For more details on FLPSX holdings, visit Finbot and type "FLPSX holdings".

16. Compare and contrast: FCNTX vs FDGRX.

Both FDGRX and FCNTX are actively managed funds focused on large growth (predominantly US) stocks.

FDGRX assets are invested in those companies that Fidelity believes have above-average growth potential. Growth may be measured by factors such as earnings or revenue.

Important to note is that FDGRX is closed to new investors.

Below is a comparison table for FCNTX and FDGRX.


FCNTX
FDGRX
Segment
U.S. Equity: Large Growth
U.S. Equity: Large Growth
Net Assets
$90.15B
$25.36B
Expense Ratio
0.68%
0.77%
Management Style
active
active
Minimum Investment
$2,500
$2,500
1-Year Return
32.26%
36.76%
3-Year Return
13.33%
16.06%
5-Year Return
16.43%
19.74%
1-Year Tax Cost Ratio
0.87%
1.31%

The two funds have comparable fees, but FDGRX performed better on the whole.  

For the most current comparison between FCNTX and FDGRX, visit Finbot and type "FCNTX vs FDGRX".

17. Compare and contrast: FCNTX vs FOCPX.

Both FCNTX and FOCPX are actively managed funds; FCNTX has more holdings in its portfolio (307 vs 213) and has a greater focus on large-cap stocks (FOCPX invests in over-the-counter stocks as well).

FOCPX invests at least 80% of assets in securities principally traded on NASDAQ or an OTC market (the latter has more small and medium-sized companies than other markets).  It invests more than 25% of total assets in the technology sector--in either "growth" stocks, or "value" stocks, or both.

Below is a comparison table for FCNTX and FOCPX.


FCNTX
FOCPX
Segment
U.S. Equity: Large Growth
U.S. Equity: Large Growth
Net Assets
$90.15B
$13.91B
Expense Ratio
0.68%
0.81%
Management Style
active
active
Minimum Investment
$2,500
$2,500
1-Year Return
32.26%
38.59%
3-Year Return
13.33%
16.59%
5-Year Return
16.43%
22.02%
1-Year Tax Cost Ratio
0.87%
0.82%

FOCPX 3-year annualized beta is 1.25, which makes it a riskier fund to invest in than FCNTX, which 3-year annualized beta is 0.89.  Visit Finbot and type "FCNTX Beta" to get the latest risk profile for FCNTX (or any other mutual fund).

FOCPX generated higher returns over the last 3-5 years than FCNTX, but it also incurred more risk.  

18. Compare and contrast: FCNTX vs VFINX.

FCNTX is an actively managed fund (with over 300 securities as its holdings), wheres VFINX is a passively managed S&P 500 index mutual fund.  

Below is a comparison table for FCNTX and VFINX.


FCNTX
VFINX
Segment
U.S. Equity: Large Growth
U.S. Equity: Large Blend
Net Assets
$90.15B
$27.66B
Expense Ratio
0.68%
0.14%
Management Style
active
passive (index-based)
Minimum Investment
$2,500
$3,000
1-Year Return
32.26%
21.67%
3-Year Return
13.33%
11.26%
5-Year Return
16.43%
15.62%
1-Year Tax Cost Ratio
0.87%
0.73%

As you can see from the table above, VFINX is a lot cheaper than FCNTX, but it also trails behind in performance.  If you'd like to get a perspective on risk-adjusted performance, visit Finbot and type "FCNTX Sharpe ratio" or "VFINX Sharpe ratio".

19. Compare and contrast: FCNTX vs VINIX.

VINIX is an institutional version of Vanguard's S&P 500 index fund, whereas FCNTX is a Fidelity actively managed fund.  Both funds are focused on large-cap stocks.

Below is a comparison table for FCNTX and VINIX.


FCNTX
VINIX
Segment
U.S. Equity: Large Growth
U.S. Equity: Large Blend
Net Assets
$90.15B
$140.59B
Expense Ratio
0.68%
0.04%
Management Style
active
passive (index-based)
Minimum Investment
$2,500
$5,000,000
1-Year Return
32.26%
21.79%
3-Year Return
13.33%
11.38%
5-Year Return
16.43%
15.76%
1-Year Tax Cost Ratio
0.87%
0.86%

You may notice that VINIX minimum investment requirement is $5M--however, many investors may have access to this fund via e.g., their 401K plans, even in the minimum investment requirement is not met.

FCNTX has higher risk-adjusted performance than VINIX, but it's also significantly more expensive. 

For the most current comparison between FCNTX and VINIX, visit Finbot and type "FCNTX vs VINIX".

20. Compare and contrast: FCNTX vs FUSVX.

FUSVX is a Fidelity S&P 500 index fund, while FCNTX is an actively managed mutual fund.  Both of them are focused on US large-cap stocks. 

FUSVX is significantly cheaper than FCNTX, but it also generated lower returns in the last 3-5 years. 

Below is a comparison table for FCNTX and FUSVX.


FCNTX
FUSVX
Segment
U.S. Equity: Large Growth
U.S. Equity: Large Blend
Net Assets
$90.15B
$75.18B
Expense Ratio
0.68%
0.05%
Management Style
active
passive (index-based)
Minimum Investment
$2,500
$10,000
YTD Return
32.26%
21.79%
1-Year Return
32.26%
21.79%
3-Year Return
13.33%
11.38%
5-Year Return
16.43%
15.74%
1-Year Tax Cost Ratio
0.87%
1.01%

For the most current comparison between FCNTX and FUSVX, visit Finbot and type "FCNTX vs FUSVX".

We hope this review has given you a perspective on FCNTX performance (returns, expenses, dividend yield) and alternative choices available to you an as investor (FCNTX vs VTI, FCNTX vs VOO, FCNTX vs S&P 500, FCNTX vs FLPSX, FCNTX vs FDGRX, FCNTX vs FOCPX, FCNTX vs FUSVX, FCNTX vs VFINX and FCNTX vs VINIX).

If you have any questions or comments, send us an email at: hi [at] finstead [dot] com.

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