Do You Know Which 6 Top-Performing Large-Growth Funds
Large-growth funds posted strong gains in 2024, thanks partly to the artificial intelligence boom. Despite slipping in December, the average large-growth fund beat the broader market last year.
To screen for the top-performing funds in this category, we looked for those with the best returns over the last one-, three-, and five-year periods. Among large-growth funds, offerings from Fidelity stood out, comprising five of the six on our list.
- Fidelity Advisor Growth Opportunities Fund FZAHX
- Fidelity Blue Chip Growth Fund FBGKX
- Fidelity Contrafund FCNKX
- Fidelity Growth Company Fund FGCKX
- Fidelity OTC Portfolio FOCKX
- Schwab US Large-Cap Growth ETF SCHG
Large-Growth Funds Performance
Over the last 12 months, large-growth funds have returned 27.14%. On an annualized rate, large-growth funds have returned 8.74% over the last three years and gained 14.44% over the last five years. That compares with the Morningstar US Market Index, which has returned 23.52% over the last 12 months, gained 8.96% per year over the last three years, and gained 13.48% per year over the last five years.
What Are Large-Growth Funds?
Large-growth portfolios invest in big US companies that are projected to grow faster than other large-cap stocks. Stocks in the top 70% of the capitalization of the US equity market are defined as large-cap. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Most of these portfolios focus on companies in rapidly expanding industries.
Screening for the Top-Performing Large-Growth Funds
We looked at returns data over the past one, three, and five years. We screened for open-ended and exchange-traded funds in the top 25% of the category using their lowest-cost primary share classes. We also filtered for funds with a Morningstar Medalist Rating of Silver or Gold. We excluded funds with assets under $100 million and analyst coverage that was not 100%. This left six names.
Because the screen was created with the lowest-cost share class for each fund, some may be listed with share classes that are not accessible to individual investors outside of retirement plans, or they may be aimed at institutional investors and require large minimum investments. The individual investor versions of those funds may carry higher fees, reducing returns to shareholders. In addition, Medalist Ratings may differ among the share classes of a fund.
Fidelity Advisor Growth Opportunities Fund
The $25 billion Fidelity Advisor Growth Opportunities Fund has gained 38.02% over the past 12 months, while the average fund in its category is up 27.14%. The Fidelity fund, launched in August 2013, has climbed 11.00% over the past three years and 17.73% over the past five.
Morningstar strategist Robby Greengold says: “During his nearly nine-year tenure at the helm, manager Kyle Weaver has maintained a portfolio distinct for its relatively light stakes in the index’s largest constituents and substantial investments in smaller-cap companies, private markets, and overseas stocks. Those ingredients have reliably cooked up a highly volatile portfolio that tends to thrive as risk appetite across markets grows but lags when defensives are in favor.”
Fidelity Blue Chip Growth Fund
The $73.9 billion Fidelity Blue Chip Growth Fund has climbed 36.88% over the past 12 months, outperforming the average fund in its category, which rose 27.14%. The Fidelity fund, launched in May 2008, has climbed 12.50% over the past three years and 20.40% over the past five.
Greengold says: “Volatility has long been the norm at this strategy, which industry veteran Sonu Kalra has skillfully steered for 15 years. He builds a portfolio of 200-plus stocks that embraces companies with higher-than-average expected growth rates, at times paltry earnings relative to their share prices, and significant price fluctuations. These features position the strategy to thrive when investors’ risk appetites grow, but they also set the stage for its underperformance when markets stumble or when value stocks—those with low price multiples and growth rates or high dividend yields—are in favor. It is an investment style that resembles other well-run Fidelity funds.”
Fidelity Contrafund
The $153 billion Fidelity Contrafund has gained 33.39% over the past 12 months, while the average fund in its category is up 27.14%. The Fidelity fund, launched in May 2008, has climbed 12.65% over the past three years and 16.83% over the past five.
Greengold says: “Will Danoff has successfully steered this diversified strategy through multiple market cycles, including recent ones. The fund’s roughly 13% annualized return over the past decade beat the S&P 500 (the fund’s broad-market prospectus benchmark) and ranked among the best-performing third of funds in either the large-blend or large-growth Morningstar Categories. It’s a particularly impressive feat given the strategy’s colossal asset base of more than $200 billion across all accounts, which has long limited its flexibility.”
Fidelity Growth Company Fund
Over the past 12 months, the $68.2 billion Fidelity Growth Company Fund rose 33.91%, while the average fund in its category rose 27.14%. The fund, launched in May 2008, has climbed 12.42% over the past three years and 21.06% over the past five.
Greengold says: “The strategy has become increasingly defined by Nvidia NVDA, the leading provider of graphics processing units that has recently become one of the world’s most valuable companies. Since becoming the portfolio’s top holding in 2016, the stock has climbed more than 100-fold in market value, thanks in large part to its recently stellar results. Through its outperformance and despite Wymer paring it back, the stock’s share of the portfolio over the past two years doubled to around 16% of assets as of September 2024. That’s a huge position size in absolute terms and relative to the stock’s 11%-13% share of relevant large-growth indexes.”
Fidelity OTC Portfolio
The $32.5 billion Fidelity OTC Portfolio has gained 32.66% over the past 12 months, while the average fund in its category is up 27.14%. The Fidelity fund, launched in May 2008, has climbed 11.14% over the past three years and 18.01% over the past five.
Morningstar senior analyst Todd Trubey says: “Chris Lin took charge as solo manager of this strategy on Oct. 1, 2019, and has put his stamp firmly upon it. The fund’s name refers to “over the counter,” which has long been the home of growth and technology fare. Lin views the strategy as an aggressive allocation in an investor’s total portfolio. He fills it about half-full with the technology stocks he knows well after successful stints at Fidelity Select Tech Hardware, Fidelity Select Semiconductors, and as Fidelity’s technology sector lead.”
Schwab US Large-Cap Growth ETF
Over the past 12 months, the $37 billion Schwab US Large-Cap Growth ETF rose 32.17%, while the average fund in its category rose 27.14%. The fund, launched in December 2009, has climbed 13.28% over the past three years and 18.70% over the past five.
Morningstar associate analyst Mo’ath Almahasneh says: “The fund replicates the Dow Jones US Large-Cap Growth Total Stock Market Index, which selects faster-growing large-cap stocks and weights them by market cap. Its holdings tend to trade at higher multiples than the market, a reflection of their lofty long-term outlooks that are also a source of risk. These firms may not live up to the expectations embedded in their higher valuations, which could hurt performance.”
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
