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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 Mutual Fund Equity Report 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 carries 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
FSCSX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Select Software & IT Services made its debut in July of 1985, and since then, FSCSX has accumulated about $8.22 billion in assets, per the most up-to-date date available. The fund is currently managed by Ali Khan who has been in charge of the fund since July of 2014.
Performance
Investors naturally seek funds with strong performance. FSCSX has a 5-year annualized total return of 11.98% and is 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 6.79%, which places it in the middle 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. Over the past three years, FSCSX's standard deviation comes in at 23.45%, compared to the category average of 27.15%. The standard deviation of the fund over the past 5 years is 20.65% compared to the category average of 24.5%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.03, so it is likely going to be as volatile as 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. With a positive alpha of 2.46, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
The mutual fund currently has 96.01% of its holdings in stocks, and these companies have an average market capitalization of $599.34 billion. With turnover at about 10%, this 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, FSCSX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 1.30%. So, FSCSX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Select Software & IT Services ( FSCSX ) 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 the Mutual Fund Equity Report 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. 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 Software & IT Services (FSCSX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Mutual Fund Equity Report 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 carries 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
FSCSX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Select Software & IT Services made its debut in July of 1985, and since then, FSCSX has accumulated about $8.22 billion in assets, per the most up-to-date date available. The fund is currently managed by Ali Khan who has been in charge of the fund since July of 2014.
Performance
Investors naturally seek funds with strong performance. FSCSX has a 5-year annualized total return of 11.98% and is 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 6.79%, which places it in the middle 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. Over the past three years, FSCSX's standard deviation comes in at 23.45%, compared to the category average of 27.15%. The standard deviation of the fund over the past 5 years is 20.65% compared to the category average of 24.5%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.03, so it is likely going to be as volatile as 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. With a positive alpha of 2.46, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
The mutual fund currently has 96.01% of its holdings in stocks, and these companies have an average market capitalization of $599.34 billion. With turnover at about 10%, this 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, FSCSX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 1.30%. So, FSCSX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Select Software & IT Services ( FSCSX ) 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 the Mutual Fund Equity Report 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. 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.