Back to top

Image: Bigstock

Is Franklin DynaTech Adviser (FDYZX) a Strong Mutual Fund Pick Right Now?

Read MoreHide Full Article

On the lookout for a Sector - Tech fund? Starting with Franklin DynaTech Adviser (FDYZX - Free Report) is one possibility. FDYZX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Tech funds is an area filled with options, and FDYZX is one of them. Sector - Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.

History of Fund/Manager

FDYZX finds itself in the Franklin Templeton family, based out of San Mateo, CA. Franklin DynaTech Adviser debuted in November of 2010. Since then, FDYZX has accumulated assets of about $3.79 billion, according to the most recently available information. The fund is currently managed by Rupert H. Johnson Jr. who has been in charge of the fund since November of 2010.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 26.86%, and is 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 25.85%, 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, FDYZX's standard deviation comes in at 21.03%, compared to the category average of 15.97%. Looking at the past 5 years, the fund's standard deviation is 17.73% compared to the category average of 13.2%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FDYZX has a 5-year beta of 0.99, which means it is likely to be as volatile as 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. FDYZX has generated a positive alpha over the past five years of 8.96, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FDYZX is a no load fund. It has an expense ratio of 0.53% compared to the category average of 1.35%. FDYZX is actually cheaper than its peers when you consider factors like cost.

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, Franklin DynaTech Adviser ( FDYZX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Franklin DynaTech Adviser ( FDYZX ) looks like a good potential choice for investors right now.

Your research on the Sector - Tech 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. 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.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Franklin DynaTech Adv (FDYZX) - free report >>

Published in