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Is Fidelity Advisor Gold A (FGDAX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Sector - Precious Metal category, but where should you start your research? Well, one fund that you should consider investigating is Fidelity Advisor Gold A (FGDAX - Free Report) . FGDAX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Precious Metal funds is an area filled with options, such as FGDAX. Usually, Sector - Precious Metal mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium. Here, stocks often trade as leveraged bets of the underlying commodity, meaning they're tied to the metal's prices and can be volatile.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FGDAX. The Fidelity Advisor Gold A made its debut in December of 2006 and FGDAX has managed to accumulate roughly $63.04 million in assets, as of the most recently available information. The fund is currently managed by Steven Calhoun who has been in charge of the fund since September of 2018.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.61%, 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 5.31%, 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. The standard deviation of FGDAX over the past three years is 21.38% compared to the category average of 12.7%. Over the past 5 years, the standard deviation of the fund is 32.07% compared to the category average of 14.71%. 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, FGDAX lost 29.69% and outperformed its peer group by 8%. This means that the fund could possibly be a better choice than its peers during a down market environment.

Nevertheless, with a 5-year beta of -0.2, the fund is likely to be less 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. The fund has produced a positive alpha over the past 5 years of 13.01, which shows that managers in this portfolio are skilled in picking 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, FGDAX is a load fund. It has an expense ratio of 1.13% compared to the category average of 1.44%. From a cost perspective, FGDAX 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 Advisor Gold A ( FGDAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

Want even more information about FGDAX? 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. 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.


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