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Is Fidelity Select Energy Portfolio (FSENX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Sector - Energy fund category, Fidelity Select Energy Portfolio (FSENX - Free Report) could be a potential option. FSENX holds 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 FSENX in the Sector - Energy category, an area that is rife with possible choices. Throughout the massive global energy sector, Sector - Energy mutual funds hold a wide range of quickly changing and vitally important industries. While oil and gas comprise the bulk of the exposure, carbon-based fuels will be the biggest group of assets in these funds, though clean energy is starting to pick up steam.
History of Fund/Manager
FSENX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Select Energy Portfolio made its debut in July of 1981 and FSENX has managed to accumulate roughly $1.90 billion in assets, as of the most recently available information. John Dowd is the fund's current manager and has held that role since July of 2006.
Performance
Of course, investors look for strong performance in funds. FSENX has a 5-year annualized total return of 0.4% 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 -5.98%, 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. FSENX's standard deviation over the past three years is 22.37% compared to the category average of 21.85%. Over the past 5 years, the standard deviation of the fund is 19.53% compared to the category average of 18.91%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In FSENX's case, the fund lost 56.37% in the most recent bear market and underperformed comparable funds by 1.05%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. The fund lost over 54% in what was its worst calendar year in a decade.
Even still, the fund has a 5-year beta of 1.07, so investors should note that it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -12.66. 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 principally on equities that are traded in the United States.
The mutual fund currently has 99.45% of its holdings in stocks, which have an average market capitalization of $54.08 billion.
Turnover is 93%, which means, on average, the fund makes fewer trades than its comparable peers.
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, FSENX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.57%. From a cost perspective, FSENX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Select Energy Portfolio FSENX 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.
Don't stop here for your research on Sector - Energy funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FSENX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Fidelity Select Energy Portfolio (FSENX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Sector - Energy fund category, Fidelity Select Energy Portfolio (FSENX - Free Report) could be a potential option. FSENX holds 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 FSENX in the Sector - Energy category, an area that is rife with possible choices. Throughout the massive global energy sector, Sector - Energy mutual funds hold a wide range of quickly changing and vitally important industries. While oil and gas comprise the bulk of the exposure, carbon-based fuels will be the biggest group of assets in these funds, though clean energy is starting to pick up steam.
History of Fund/Manager
FSENX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Select Energy Portfolio made its debut in July of 1981 and FSENX has managed to accumulate roughly $1.90 billion in assets, as of the most recently available information. John Dowd is the fund's current manager and has held that role since July of 2006.
Performance
Of course, investors look for strong performance in funds. FSENX has a 5-year annualized total return of 0.4% 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 -5.98%, 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. FSENX's standard deviation over the past three years is 22.37% compared to the category average of 21.85%. Over the past 5 years, the standard deviation of the fund is 19.53% compared to the category average of 18.91%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In FSENX's case, the fund lost 56.37% in the most recent bear market and underperformed comparable funds by 1.05%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. The fund lost over 54% in what was its worst calendar year in a decade.
Even still, the fund has a 5-year beta of 1.07, so investors should note that it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -12.66. 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 principally on equities that are traded in the United States.
The mutual fund currently has 99.45% of its holdings in stocks, which have an average market capitalization of $54.08 billion.
Turnover is 93%, which means, on average, the fund makes fewer trades than its comparable peers.
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, FSENX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.57%. From a cost perspective, FSENX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Select Energy Portfolio FSENX 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.
Don't stop here for your research on Sector - Energy funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FSENX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.