Fidelity Manager Sharpens His Focus

Robert Bertelson has put his stamp on Fidelity Independence.
Since taking the helm of the now $5.9 billion portfolio (NASDAQ:FDFFX - News) on Nov. 9, 2006, the fund is less diversified and more growth-oriented. Holdings tend to be bigger stocks now. Only two of its 20 biggest positions remain among its top holdings.

Industrial materials and energy have been the two top performing sectors over the past 12 months, according to Morningstar. They gained almost 37% and 32%, respectively. That's where the fund had the bulk of its money, about 67%, as of Feb. 29.

No other sector accounted for a double-digit weighting. The fund had no money in the software, media and telecom sectors.

During the past two years under Bertelson's predecessor, Jason Weiner, no sector had more than 21% of fund assets. Four had double-digit weightings. None had zero weightings.

The fund also has taken advantage of the market's shift in favor of large-cap and growth stocks. The average market cap of fund holdings has climbed to $21.9 billion. It was $15.1billion before Bertelson took over.

The fund had about 54% of assets in large growth stocks as of Feb. 29. It had only 31% of assets in that style group at the end of Weiner's tenure.

Bertelson's shifts generally have paid off. Over the past 12 months, the fund gained 20.41% vs. a 3.55% setback for the S&P 500. Over Weiner's final year the fund advanced 15.64%. The S&P 500 gained 15.87%.

So far this year, going into Wednesday, the fund was down 2.52%. Its large-cap growth rivals tracked by Morningstar averaged an 8.45% decline. The S&P 500 was down 6.48%.

Over the past three years, which includes time under Weiner's tenure, the fund's average annual gain was 17.49% vs. 7.44% for its peers and 6.97% for the S&P 500.

Super Sector

The fund's three top holdings, as of its latest disclosure, are in the fund's biggest sector. Industrial materials account for 36% of fund assets. The three stocks are plays on soaring global demand for better foods and better farm acreage yield. Rising wealth in emerging markets is feeding that demand. So is increasing use of ethanol as a fuel.

Mosaic (NYSE:MOS - News) and Potash Corp. of Saskatchewan (NYSE:POT - News) make fertilizers. Monsanto (NYSE:MON - News) makes seeds and pesticides. The stocks are up 27%, 22% and 8%, respectively, this year.

Three more top holdings are in the fund's second-largest sector, energy. They're being helped this week by record oil prices.

Ultra Petroleum (NYSE:UPL - News) is an exploration and production company. It is active in the Green River Basin of Wyoming and Bohai Bay, China. The stock is up 14% so far this year.

Exxon Mobil (NYSE:XOM - News) saw earnings growth of 26% last quarter. That was up from a 4% year-over-year decline the prior quarter. The energy giant is back above its 50-day moving average. It had spent much of the first quarter either below that support line or meeting resistance each time it poked above it.

Still, Exxon stock is down 4.35% this year. Many investors fear that slowing economic growth, especially in the U.S., will curb demand for fuel.

Coal colossus Peabody Energy (NYSE:BTU - News) is down almost 3% this year, but just 7% below its 52-week high. Coal prices on the spot market recently have climbed.

HSBC analyst Hassan Ahmed said on Wednesday that coal stocks ran up more than 55% over the past 12 months. The S&P 500 fell 5% in that period. He added that he sees consensus earnings estimates for the group in 2009 as too high because coal's price rise hasn't kept pace.

Gold's Glitter

Goldcorp (NYSE:GG - News), a top buy in the fund's latest disclosure, is up 16% this year. Goldcorp and similar holdings like Freeport McMoRan Copper & Gold (NYSE:FCX - News) are being driven by investors' concern about rising inflation and the U.S. dollar's decline. Freeport also is powered by the ongoing commodity boom.