If you've been stuck searching for Sector - Finance funds, consider Fidelity Select Financial Services (FIDSX Quick QuoteFIDSX - Free Report) as a possibility. FIDSX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

FIDSX is one of many Sector - Finance funds to choose from. Sector - Finance mutual funds provide investors with a diversified and stabilized investment approach focused on the financial space, which is a notoriously large, complex, and heavily-regulated industry. These funds include everything from insurance companies and exchanges to banks and investment giants; interest rates can impact the players of this space as well.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FIDSX. Fidelity Select Financial Services made its debut in December of 1981, and since then, FIDSX has accumulated about $698.59 million in assets, per the most up-to-date date available. Matt Reed is the fund's current manager and has held that role since June of 2019.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 12.03%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.93%, which places it in the top 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 FIDSX over the past three years is 21.55% compared to the category average of 23.46%. The standard deviation of the fund over the past 5 years is 24.74% compared to the category average of 25.65%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.09, the fund is likely to be more volatile than the market average. 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 -2.1. This means that managers in this portfolio find it difficult to pick 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.

This fund is currently holding about 78.63% in stocks, and these companies have an average market capitalization of $97.94 billion. The fund has the heaviest exposure to the following market sectors:

• Finance
• Technology

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, FIDSX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.24%. So, FIDSX 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.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Select Financial Services ( FIDSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Financial Services ( FIDSX ) looks like a good potential choice for investors right now.

For additional information on the Sector - Finance 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 FIDSX too for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.