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Is MFS Technology Fund A (MTCAX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Sector - Tech fund? MFS Technology Fund A (MTCAX - Free Report) is a possible starting point. MTCAX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that MTCAX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
History of Fund/Manager
MTCAX is a part of the MFS family of funds, a company based out of Boston, MA. MFS Technology Fund A debuted in January of 1997. Since then, MTCAX has accumulated assets of about $881.85 million, according to the most recently available information. The fund's current manager, Reiner Dobbelmann, has been in charge of the fund since May of 2022.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 16.45%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.69%, 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. Over the past three years, MTCAX's standard deviation comes in at 22.78%, compared to the category average of 15.57%. The fund's standard deviation over the past 5 years is 21.75% compared to the category average of 16.28%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.08, so investors should note that it is hypothetically more volatile than the market at large. 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. MTCAX has generated a positive alpha over the past five years of 0.11, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 76.41% of its assets in stocks, with an average market capitalization of $849.09 billion. Turnover is 16%, which means, on average, the fund makes fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, MTCAX is a load fund. It has an expense ratio of 1.13% compared to the category average of 0.98%. MTCAX is actually more expensive than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.
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 similar performance, worse downside risk, and higher fees, MFS Technology Fund A ( MTCAX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on the Sector - Tech 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 MTCAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is MFS Technology Fund A (MTCAX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Tech fund? MFS Technology Fund A (MTCAX - Free Report) is a possible starting point. MTCAX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that MTCAX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
History of Fund/Manager
MTCAX is a part of the MFS family of funds, a company based out of Boston, MA. MFS Technology Fund A debuted in January of 1997. Since then, MTCAX has accumulated assets of about $881.85 million, according to the most recently available information. The fund's current manager, Reiner Dobbelmann, has been in charge of the fund since May of 2022.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 16.45%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.69%, 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. Over the past three years, MTCAX's standard deviation comes in at 22.78%, compared to the category average of 15.57%. The fund's standard deviation over the past 5 years is 21.75% compared to the category average of 16.28%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.08, so investors should note that it is hypothetically more volatile than the market at large. 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. MTCAX has generated a positive alpha over the past five years of 0.11, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 76.41% of its assets in stocks, with an average market capitalization of $849.09 billion. Turnover is 16%, which means, on average, the fund makes fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, MTCAX is a load fund. It has an expense ratio of 1.13% compared to the category average of 0.98%. MTCAX is actually more expensive than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.
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 similar performance, worse downside risk, and higher fees, MFS Technology Fund A ( MTCAX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on the Sector - Tech 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 MTCAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.