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Is Fidelity International Real Estate (FIREX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Sector - Real Estate funds, you might want to consider passing on by Fidelity International Real Estate (FIREX - Free Report) as a possibility. FIREX bears 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 made its debut in December of 2004, and since then, FIREX has accumulated about $250.24 million in assets, per the most up-to-date date available. The fund is currently managed by Guillermo de las Casas who has been in charge of the fund since April of 2010.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 5.57%, and it sits in the middle 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 8.64%, 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, FIREX's standard deviation comes in at 9.78%, compared to the category average of 9.48%. The fund's standard deviation over the past 5 years is 10.44% compared to the category average of 9.93%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, FIREX lost 67.51% and underperformed its peer group by 3.61%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.59, which means it is hypothetically 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. Over the past 5 years, the fund has a negative alpha of -0.23. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, FIREX is a no load fund. It has an expense ratio of 1.03% compared to the category average of 1.22%. Looking at the fund from a cost perspective, FIREX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity International Real Estate ( FIREX ) has a low Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Sector - Real Estate, make sure to go to www.zacks.com/funds/mutual-funds 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 International Real Estate (FIREX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Sector - Real Estate funds, you might want to consider passing on by Fidelity International Real Estate (FIREX - Free Report) as a possibility. FIREX bears 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 made its debut in December of 2004, and since then, FIREX has accumulated about $250.24 million in assets, per the most up-to-date date available. The fund is currently managed by Guillermo de las Casas who has been in charge of the fund since April of 2010.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 5.57%, and it sits in the middle 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 8.64%, 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, FIREX's standard deviation comes in at 9.78%, compared to the category average of 9.48%. The fund's standard deviation over the past 5 years is 10.44% compared to the category average of 9.93%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, FIREX lost 67.51% and underperformed its peer group by 3.61%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.59, which means it is hypothetically 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. Over the past 5 years, the fund has a negative alpha of -0.23. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, FIREX is a no load fund. It has an expense ratio of 1.03% compared to the category average of 1.22%. Looking at the fund from a cost perspective, FIREX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity International Real Estate ( FIREX ) has a low Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Sector - Real Estate, make sure to go to www.zacks.com/funds/mutual-funds 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.