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Is Fidelity Select Energy Portfolio (FSENX) a Strong Mutual Fund Pick Right Now?

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If investors are looking at the Sector - Energy fund category, Fidelity Select Energy Portfolio (FSENX - Free Report) could be a potential option. FSENX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify FSENX in the Sector - Energy category, an area that is rife with possible choices. Throughout the massive global energy sector, Sector - Energy mutual funds hold a wide range of quickly changing and vitally important industries. While oil and gas comprise the bulk of the exposure, carbon-based fuels will be the biggest group of assets in these funds, though clean energy is starting to pick up steam.

History of Fund/Manager

Fidelity is responsible for FSENX, and the company is based out of Boston, MA. The Fidelity Select Energy Portfolio made its debut in July of 1981 and FSENX has managed to accumulate roughly $1.10 billion in assets, as of the most recently available information. The fund is currently managed by Maurice FitzMaurice who has been in charge of the fund since January of 2020.

Performance

Of course, investors look for strong performance in funds. FSENX has a 5-year annualized total return of -4.2% and it sits in the top 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 -12.17%, 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. FSENX's standard deviation over the past three years is 41.62% compared to the category average of 43.37%. The standard deviation of the fund over the past 5 years is 34.41% compared to the category average of 36.4%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.81, the fund is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -25.11, which shows 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, FSENX is a no load fund. It has an expense ratio of 0.84% compared to the category average of 1.53%. So, FSENX is actually cheaper than its peers from a cost perspective.

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 Select Energy Portfolio ( FSENX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Sector - Energy, make sure to go to www.zacks.com/funds/mutual-funds 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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