Replacement for Contra Fund Needed

[Free To Canoe]

I have my US equity allocation in both index funds and Fidelity Contra fund (FCNTX). I am OK with it. I like that I have a seasoned manager there and that he can beat the index consistantly. I would like to sell it primarily to harvest the gain for tax purposes. I understand that there are issues with Contra being too big to be effective.
So, I am open to replacing it with another or just ideas on what to do with the money.

Free to canoe

 

[Rustward]

Will be interested in the replies. Contra fund is one of my core holdings.

 

[ziggy29]

I understand that there are issues with Contra being too big to be effective.

Not trying to talk you out of it, and I don't put much of my self-directed investments into managed funds when I have an index option, but I'm looking at M* data and it doesn't appear "too big to be effective" yet:

FCNTX Fidelity Contrafund, mutual funds, quote, price - Morningstar

It has considerably beaten the S&P 500 year to date, for the last year, 3 years, 5 years and 10 years. So while I do get concerned about funds getting too large, with this track record I wouldn't be eager to dump it until and unless it stops outperforming the relevant benchmark (or until the management changes).

 

[LOL!]

This is a large-cap growth fund. If you like it, why do you want to replace it?

You may wish to compare recent after-tax performance to something like Vanguard Growth Index (VIGRX). OTOH, you can harvest the gain and immediately buy back shares of Contra without a problem.

Or maybe you no longer want large-cap growth?

(Contra's benchmark is NOT the S&P500 index nor is it US Large-cap growth since Contra contains 20% foreign equities and 6% cash.)

 

[ziggy29]

OTOH, you can harvest the gain and immediately buy back shares of Contra without a problem.

Good point. Since there's a gain and not a loss, there's no tax reason why you can't immediately repurchase the shares; it's not like harvesting tax losses where the wash sale rules apply.

 

[Free To Canoe]

Yea, I guess I would only be out of the market for a few days.

The other day I was transferring DWs IRA into Vanguard. I wanted to hang on to a certain fund that is having a very good 10 year run. The Vanguard rep asked if I would like a Vanguard replacement for this. I almost said that there is no way you have a replacement but luckily, I didn't. I learned that they have an excellent fund that is equivalent in the categories that I value. Now I have a back up fund.

You and your fund screener (like the Fido rep suggested) can miss things. It pays to ask the question and see what others have to say.

Free to canoe

 

[Animorph]

Contra is good, and selling and rebuying sounds like your best move. I also have AMAGX, which is a little quirky but has a nice track record that's comparable to Contra. No financials helped it in 2008-2009, but that might not work as well next time. There's a couple of nice Vanguard funds, but they look closed to new investors.