Sector - Real Estate fund seekers should consider taking a look at Fidelity International Real Estate (FIREX Quick QuoteFIREX - Free Report) . FIREX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify FIREX in the Sector - Real Estate category, an area full of possible choices. Sector - Real Estate mutual funds typically invest in various real estate investment trusts (REIT). A REIT is a popular income vehicle thanks to taxation rules that require REITs to payout at least 90% of their income each year in order to avoid double taxation. This technique makes securities here high dividend payers, and almost bond like in some cases; however, they still carry the risk of equities.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FIREX. Fidelity International Real Estate made its debut in December of 2004, and since then, FIREX has accumulated about $267.24 million in assets, per the most up-to-date date available. Guillermo de las Casas is the fund's current manager and has held that role since April of 2010.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 8.74%, and it sits in the top 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 7.87%, which places it in the top third during this time-frame.

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 FIREX over the past three years is 15.29% compared to the category average of 14.59%. The fund's standard deviation over the past 5 years is 13.41% compared to the category average of 12.56%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.7, which means it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.97. This means that 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, FIREX is a no load fund. It has an expense ratio of 0.99% compared to the category average of 1.24%. From a cost perspective, FIREX is actually cheaper than its peers.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity International Real Estate ( FIREX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Sector - Real Estate, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.