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Is Fidelity International Real Estate (FIREX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Sector - Real Estate funds, it would not be wise to start your search with Fidelity International Real Estate (FIREX - Free Report) . FIREX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FIREX in Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players--almost bond-like in some cases--though their risk is similar to equities.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FIREX. Fidelity International Real Estate debuted in December of 2004. Since then, FIREX has accumulated assets of about $223.16 million, according to the most recently available information. The fund is currently managed by Guillermo de las Casas who has been in charge of the fund since April of 2010.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FIREX has a 5-year annualized total return of 4.89% and it sits in the middle 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 6.24%, 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. Compared to the category average of 9.01%, the standard deviation of FIREX over the past three years is 10.3%. The fund's standard deviation over the past 5 years is 9.85% compared to the category average of 9.24%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, FIREX lost 67.51% and underperformed comparable funds by 3.61%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Investors should note that the fund has a 5-year beta of 0.7, so it is likely going to be less 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. With a negative alpha of -2.68, 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 1.04% compared to the category average of 1.23%. From a cost perspective, FIREX is actually cheaper than its peers.
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 International Real Estate ( FIREX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Want even more information about FIREX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Fidelity International Real Estate (FIREX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Sector - Real Estate funds, it would not be wise to start your search with Fidelity International Real Estate (FIREX - Free Report) . FIREX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FIREX in Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players--almost bond-like in some cases--though their risk is similar to equities.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FIREX. Fidelity International Real Estate debuted in December of 2004. Since then, FIREX has accumulated assets of about $223.16 million, according to the most recently available information. The fund is currently managed by Guillermo de las Casas who has been in charge of the fund since April of 2010.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FIREX has a 5-year annualized total return of 4.89% and it sits in the middle 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 6.24%, 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. Compared to the category average of 9.01%, the standard deviation of FIREX over the past three years is 10.3%. The fund's standard deviation over the past 5 years is 9.85% compared to the category average of 9.24%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, FIREX lost 67.51% and underperformed comparable funds by 3.61%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Investors should note that the fund has a 5-year beta of 0.7, so it is likely going to be less 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. With a negative alpha of -2.68, 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 1.04% compared to the category average of 1.23%. From a cost perspective, FIREX is actually cheaper than its peers.
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 International Real Estate ( FIREX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Want even more information about FIREX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.