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Is Fidelity Select Defense & Aerospace (FSDAX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Sector - Other funds, a place to start could be Fidelity Select Defense & Aerospace (FSDAX - Free Report) . FSDAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
FSDAX is a part of the Fidelity family of funds, a company based out of Boston, MA. Since Fidelity Select Defense & Aerospace made its debut in May of 1984, FSDAX has garnered more than $3.09 billion in assets. The fund's current manager, Jonathan Siegmann, has been in charge of the fund since October of 2015.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 15.37%, 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 18.73%, 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 14.36%, the standard deviation of FSDAX over the past three years is 17.49%. Looking at the past 5 years, the fund's standard deviation is 16.2% compared to the category average of 14.7%. 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 FSDAX's case, the fund lost 55.25% in the most recent bear market and underperformed its peer group by 5%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.08, 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 3.07, 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, FSDAX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.28%. So, FSDAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Select Defense & Aerospace ( FSDAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Defense & Aerospace ( FSDAX ) looks like a good potential choice for investors right now.
Your research on the Sector - Other segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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 Select Defense & Aerospace (FSDAX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Sector - Other funds, a place to start could be Fidelity Select Defense & Aerospace (FSDAX - Free Report) . FSDAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
FSDAX is a part of the Fidelity family of funds, a company based out of Boston, MA. Since Fidelity Select Defense & Aerospace made its debut in May of 1984, FSDAX has garnered more than $3.09 billion in assets. The fund's current manager, Jonathan Siegmann, has been in charge of the fund since October of 2015.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 15.37%, 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 18.73%, 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 14.36%, the standard deviation of FSDAX over the past three years is 17.49%. Looking at the past 5 years, the fund's standard deviation is 16.2% compared to the category average of 14.7%. 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 FSDAX's case, the fund lost 55.25% in the most recent bear market and underperformed its peer group by 5%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.08, 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 3.07, 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, FSDAX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.28%. So, FSDAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Select Defense & Aerospace ( FSDAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Defense & Aerospace ( FSDAX ) looks like a good potential choice for investors right now.
Your research on the Sector - Other segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.