BOSTON (MarketWatch) -- Jim Lowell, editor of the Fidelity Investor newsletter, says that investors looking at a big fund family like Fidelity need to be wary of group think, where managers tend to draw their opinions from the same pool and wind up holding the same stocks.
Lowell noted in a radio interview with MarketWatch senior columnist Chuck Jaffe that several Fidelity large-cap funds tilt towards financial-services companies, which makes it important for investors to know the underlying portfolio so that they get real diversification when they pick two funds from the same asset class.
Lowell suggested buying Fidelity Select Natural Gas /zigman2/quotes/201887980/realtime FSNGX -4.26% -- although he prefers Fidelity Select Energy Services /zigman2/quotes/208030405/realtime FSESX -4.24% and Fidelity Select Natural Resources /zigman2/quotes/200705453/realtime FNARX +1.12% -- Fidelity Select Air Transportation /zigman2/quotes/203389936/realtime FSAIX +0.58% , Fidelity Large Cap Value /zigman2/quotes/201908731/realtime FSLVX +1.65% , Fidelity Small Cap Value /zigman2/quotes/208667044/realtime FCPVX +2.57% , Fidelity Value /zigman2/quotes/207123175/realtime FDVLX +2.45% and Fidelity Convertible Securities /zigman2/quotes/200124867/realtime FCVSX +1.38% . He put a hold on Fidelity Growth & Income /zigman2/quotes/207418427/realtime FGRIX +1.76% and Fidelity Advisor Capital Development /zigman2/quotes/205663016/realtime FDETX +1.86% , and suggested selling Fidelity Select Automotive /zigman2/quotes/205063905/realtime FSAVX +4.30% and Fidelity Florida Municipal Income .
In another interview, Gregg Brewer, executive director of research for Value Line, recommended the Vanguard Total International Stock Index fund /zigman2/quotes/210096929/realtime VGTSX +1.18% and its exchange-traded fund doppelganger, the Vanguard FTSE All-World ex-US fund /zigman2/quotes/203057966/composite VEU +1.24% . Brewer noted that both funds are an ideal way to get broad international exposure at a low cost.
Jaffe's radio show regularly features reviews of stocks and mutual funds suggested by MarketWatch readers; to request a stock or mutual fund for review, send your name, hometown and the ticker symbols that interest you to Chuck Jaffe .