Actively managed mutual funds have kind of fallen out of favor with investors these days. It's not hard to understand why: Many are weighed down by big fees that aren't justified by their market-lagging performance. 

That's one reason low-fee index funds and ETFs have become so popular. But there are still some mutual funds out there that deliver on their original promise: market-beating returns for ordinary investors at a reasonable price.

Fidelity Growth Company Fund (FDGRX -0.09%) is one of those funds. Let's take a closer look.

Red and green arrows pointing down and up, respectively, laid over stock percentage movements on digital screen

Image source: Getty Images.

A top-notch stock-picker with a great long-term track record
In many ways, Fidelity Growth Company Fund is a lot like its older sibling, the legendary Fidelity Contrafund (FCNTX 0.05%). Like Contrafund, Fidelity Growth Company is a big ($42.5 billion) fund run by a single human manager who has been on the job for many years.

Growth Company was founded in the 1980s, but it has been run since 1997 by Steve Wymer. The fund's investment objective -- "seeks capital appreciation" -- is deliberately vague, giving Wymer room to pick great stocks wherever he finds them.

That's a good thing, because Wymer's stock-picking has been terrific for many years. The fund has handily outperformed its benchmark -- the aggressive Russell 3000 Growth Index -- for all periods including the last year, with a 12.09% average annual total return over the last 10 years (as of March 31), compared to 9.41% for the index. We all know that "past performance is no guarantee of future results," but a long track record like that inspires confidence. And it has been good recently, too: It was up 16.98% in the year ended March 31.

Morningstar gives Fidelity Growth Company five stars, noting that its 10-year performance puts it in the top 2% of Large Growth funds over that period.

A "buy and hold" strategy with the emphasis on "hold"
While Wymer has the freedom to buy non-U.S. stocks, he mostly sticks close to home. About 94% of the fund's holdings were U.S. companies as of March 31, weighted strongly toward information technology and health care stocks. And given the fund's size, it's no surprise that its holdings are heavily weighted toward big companies -- even a big holding of the hottest small-cap stock won't make much of an impact on a $42.5 billion fund.

Fidelity Growth Company's top 10 holdings made up 25.49% of the fund as of March 31. Here they are:

  1. Apple
  3. Facebook
  4. Google (Class A)
  5. Regeneron Pharmaceuticals
  6. Nvidia
  7. Google (Class C)
  9. Gilead Sciences
  10. Alkermes PLC

Clearly, Wymer likes big successful companies -- but specifically, he likes companies that are built to grow over an extended period. A cornerstone of Wymer's investment philosophy is that the market often underestimates the duration of a company's growth -- or put another way, that it's often worthwhile to hold good stocks for a very long time. 

As you'd expect from a manager with such an approach, the fund's turnover rate is extremely low, just 12%. (That means that only 12% of the fund's holdings have changed in the last year. Many stock funds have a turnover rate of 100% or more.) 

That's not just good investing practice, it helps keep the fund's costs down. Fidelity Growth Company's expense ratio over the last year was 0.82%, or $8.20 per thousand dollars invested. That's considerably more than you'll pay for a low-cost index fund, but it's below the average (about 1.2% last year) for funds in Morningstar's Large Growth category.

Fidelity Growth Company is closed right now, but you might still be able to invest
Unfortunately, Fidelity Growth Company is closed to new retail investors at the moment. Fidelity closes some of its funds from time to time to give the manager a break from trying to invest big flows of money from new investors. 

When it's open, Growth Company is easy to buy. The minimum investment is just $2,500, there's no minimum on subsequent investments, and there are no loads or sales charges.

Even though it's closed to retail investors, you may still be able to invest in Growth Company through your workplace retirement savings plan. If so, give this one a look: Many funds can boast flashy one-year returns, but it's rare to fund a fund that has performed so well over the long haul.