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Is Fidelity Select Software & IT Services (FSCSX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Sector - Tech category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Select Software & IT Services (FSCSX - Free Report) . FSCSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that FSCSX 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
Fidelity is based in Boston, MA, and is the manager of FSCSX. The Fidelity Select Software & IT Services made its debut in July of 1985 and FSCSX has managed to accumulate roughly $10.97 billion in assets, as of the most recently available information. Ali Khan is the fund's current manager and has held that role since July of 2014.
Performance
Investors naturally seek funds with strong performance. FSCSX has a 5-year annualized total return of 15.46% and is 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 4.31%, 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 FSCSX over the past three years is 21.34% compared to the category average of 25.79%. Looking at the past 5 years, the fund's standard deviation is 21.22% compared to the category average of 25.17%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.05, the fund is likely to be more volatile than 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. The fund has produced a positive alpha over the past 5 years of 0.28, which shows that managers in this portfolio are skilled in picking 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, FSCSX is a no load fund. It has an expense ratio of 0.67% compared to the category average of 1.24%. Looking at the fund from a cost perspective, FSCSX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Fidelity Select Software & IT Services ( FSCSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a great potential 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 FSCSX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Fidelity Select Software & IT Services (FSCSX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Sector - Tech category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Select Software & IT Services (FSCSX - Free Report) . FSCSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that FSCSX 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
Fidelity is based in Boston, MA, and is the manager of FSCSX. The Fidelity Select Software & IT Services made its debut in July of 1985 and FSCSX has managed to accumulate roughly $10.97 billion in assets, as of the most recently available information. Ali Khan is the fund's current manager and has held that role since July of 2014.
Performance
Investors naturally seek funds with strong performance. FSCSX has a 5-year annualized total return of 15.46% and is 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 4.31%, 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 FSCSX over the past three years is 21.34% compared to the category average of 25.79%. Looking at the past 5 years, the fund's standard deviation is 21.22% compared to the category average of 25.17%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.05, the fund is likely to be more volatile than 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. The fund has produced a positive alpha over the past 5 years of 0.28, which shows that managers in this portfolio are skilled in picking 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, FSCSX is a no load fund. It has an expense ratio of 0.67% compared to the category average of 1.24%. Looking at the fund from a cost perspective, FSCSX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Fidelity Select Software & IT Services ( FSCSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a great potential 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 FSCSX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.