Mutual Fund Equity Report fund seekers should consider taking a look at Fidelity Telecom/Utilities Fund (FIUIX Quick QuoteFIUIX - Free Report) . FIUIX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FIUIX. Fidelity Telecom/Utilities Fund made its debut in November of 1987, and since then, FIUIX has accumulated about $867.18 million in assets, per the most up-to-date date available. The fund's current manager, Douglas Simmons, has been in charge of the fund since September of 2005.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 5.49%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 6.22%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 16.6%, the standard deviation of FIUIX over the past three years is 15.18%. Looking at the past 5 years, the fund's standard deviation is 14.96% compared to the category average of 16.13%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FIUIX has a 5-year beta of 0.61, which means it is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -1.71, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FIUIX is a no load fund. It has an expense ratio of 0.72% compared to the category average of 1.17%. FIUIX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Telecom/Utilities Fund ( FIUIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Fidelity Telecom/Utilities Fund ( FIUIX ) looks like a great potential choice for investors right now.

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