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Is BlackRock Science & Technology Opportunities A (BGSAX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Sector - Tech fund could think about starting with BlackRock Science & Technology Opportunities A (BGSAX - Free Report) . BGSAX holds 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 BGSAX 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

BlackRock is based in New York, NY, and is the manager of BGSAX. Since BlackRock Science & Technology Opportunities A made its debut in May of 2000, BGSAX has garnered more than $2.73 billion in assets. The fund is currently managed by Tony Kim who has been in charge of the fund since June of 2013.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 37.49%, 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 36.08%, 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. BGSAX's standard deviation over the past three years is 23.56% compared to the category average of 16.7%. Over the past 5 years, the standard deviation of the fund is 19.63% compared to the category average of 13.89%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as 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. BGSAX has generated a positive alpha over the past five years of 17.31, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, BGSAX is a load fund. It has an expense ratio of 1.17% compared to the category average of 1.35%. From a cost perspective, BGSAX is actually cheaper than its peers.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Overall, BlackRock Science & Technology Opportunities A ( BGSAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, BlackRock Science & Technology Opportunities A ( BGSAX ) looks like a good potential choice for investors right now.

For additional information on the Sector - Tech area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into BGSAX too 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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