Any investors hoping to find a Sector - Tech fund could think about starting with Fidelity Select Software & Company Services (FSCSX Quick QuoteFSCSX - Free Report) . FSCSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FSCSX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FSCSX. Fidelity Select Software & Company Services made its debut in July of 1985, and since then, FSCSX has accumulated about $12.92 billion in assets, per the most up-to-date date available. Ali Khan is the fund's current manager and has held that role since July of 2014.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 29.3%, and is 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 27.77%, 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, FSCSX's standard deviation comes in at 20.06%, compared to the category average of 23.53%. Over the past 5 years, the standard deviation of the fund is 16.97% compared to the category average of 19.8%. This makes the fund less 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. FSCSX has a 5-year beta of 0.99, which means it is likely to be as volatile as the market average. 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. FSCSX's 5-year performance has produced a positive alpha of 10.52, which means 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, FSCSX is a no load fund. It has an expense ratio of 0.69% compared to the category average of 1.35%. FSCSX is actually cheaper than its peers when you consider factors like cost.

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 Software & Company Services ( FSCSX ) 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.

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