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Is Fidelity Select Defense & Aerospace (FSDAX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Sector - Other fund category, Fidelity Select Defense & Aerospace (FSDAX - Free Report) could be a potential option. FSDAX has a Zacks Mutual Fund Rank of 2 (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 FSDAX. Since Fidelity Select Defense & Aerospace made its debut in May of 1984, FSDAX has garnered more than $1.65 billion in assets. The fund is currently managed by Clayton Pfannenstiel who has been in charge of the fund since December of 2021.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 7.94%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.55%, 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. The standard deviation of FSDAX over the past three years is 19.7% compared to the category average of 22.13%. The fund's standard deviation over the past 5 years is 24.01% compared to the category average of 23.67%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.98, the fund is likely to be as volatile as the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. FSDAX's 5-year performance has produced a negative alpha of -5.32, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FSDAX is a no load fund. It has an expense ratio of 0.73% compared to the category average of 0.86%. From a cost perspective, FSDAX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while 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, even with its comparatively weak performance, average downside risk, and lower fees, Fidelity Select Defense & Aerospace ( FSDAX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
For additional information on the Sector - Other area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSDAX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Fidelity Select Defense & Aerospace (FSDAX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Sector - Other fund category, Fidelity Select Defense & Aerospace (FSDAX - Free Report) could be a potential option. FSDAX has a Zacks Mutual Fund Rank of 2 (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 FSDAX. Since Fidelity Select Defense & Aerospace made its debut in May of 1984, FSDAX has garnered more than $1.65 billion in assets. The fund is currently managed by Clayton Pfannenstiel who has been in charge of the fund since December of 2021.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 7.94%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.55%, 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. The standard deviation of FSDAX over the past three years is 19.7% compared to the category average of 22.13%. The fund's standard deviation over the past 5 years is 24.01% compared to the category average of 23.67%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.98, the fund is likely to be as volatile as the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. FSDAX's 5-year performance has produced a negative alpha of -5.32, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FSDAX is a no load fund. It has an expense ratio of 0.73% compared to the category average of 0.86%. From a cost perspective, FSDAX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while 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, even with its comparatively weak performance, average downside risk, and lower fees, Fidelity Select Defense & Aerospace ( FSDAX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
For additional information on the Sector - Other area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSDAX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.