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Is Fidelity Select Health Care (FSPHX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Sector - Health fund category, Fidelity Select Health Care (FSPHX - Free Report) could be a potential option. FSPHX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FSPHX as Sector - Health, a segment packed with options. Sector - Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSPHX. Fidelity Select Health Care debuted in July of 1981. Since then, FSPHX has accumulated assets of about $6.70 billion, according to the most recently available information. The fund is currently managed by Edward L. Yoon who has been in charge of the fund since October of 2008.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 11%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.97%, 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. Over the past three years, FSPHX's standard deviation comes in at 16.78%, compared to the category average of 18.24%. Looking at the past 5 years, the fund's standard deviation is 16.49% compared to the category average of 17.57%. This makes the fund less 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 FSPHX's case, the fund lost 39.99% in the most recent bear market and underperformed comparable funds by 6.75%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.06, which means 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. The fund has produced a positive alpha over the past 5 years of 2.63, which shows that managers in this portfolio are skilled in picking 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, FSPHX is a no load fund. It has an expense ratio of 0.70% compared to the category average of 1.29%. So, FSPHX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Select Health Care ( FSPHX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Sector - Health 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 FSPHX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Fidelity Select Health Care (FSPHX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Sector - Health fund category, Fidelity Select Health Care (FSPHX - Free Report) could be a potential option. FSPHX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FSPHX as Sector - Health, a segment packed with options. Sector - Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSPHX. Fidelity Select Health Care debuted in July of 1981. Since then, FSPHX has accumulated assets of about $6.70 billion, according to the most recently available information. The fund is currently managed by Edward L. Yoon who has been in charge of the fund since October of 2008.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 11%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.97%, 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. Over the past three years, FSPHX's standard deviation comes in at 16.78%, compared to the category average of 18.24%. Looking at the past 5 years, the fund's standard deviation is 16.49% compared to the category average of 17.57%. This makes the fund less 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 FSPHX's case, the fund lost 39.99% in the most recent bear market and underperformed comparable funds by 6.75%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.06, which means 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. The fund has produced a positive alpha over the past 5 years of 2.63, which shows that managers in this portfolio are skilled in picking 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, FSPHX is a no load fund. It has an expense ratio of 0.70% compared to the category average of 1.29%. So, FSPHX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Select Health Care ( FSPHX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Sector - Health 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 FSPHX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.