We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
FDCPX Or FDYZX: Which Technology Fund Should You Buy?
Read MoreHide Full Article
Risk lovers seeking healthy returns over a fairly long investment horizon may opt for technology mutual funds. It is believed that the technology sector is poised for a brighter earnings performance than others owing to innovation and greater demand. Improving industry fundamentals and emerging technologies — such as wearables, VR headsets, drones, virtual reality devices and artificial intelligence — are the key catalysts for the sector.
Meanwhile, most mutual funds investing in securities from these sectors prefer a growth-oriented approach that includes focusing on companies with strong fundamentals and a relatively higher investment prospect. Moreover, technology now has broader coverage than just hardware and software companies. Social media and Internet companies are also part of the technology landscape today.
Moreover, technology has come to have a broader meaning than just hardware and software. Social media and Internet companies are now part of the technology landscape. The Technology Select Sector SPDR Fund (XLK) has gained 32.5% over the past year.
Under such circumstances, investing in technology mutual funds seems prudent. However, choosing the right mutual funds for your portfolio can be cumbersome. To that end, let us find out which of the two funds, viz., Fidelity Select Computers Portfolio (FDCPX - Free Report) and Franklin DynaTech Fund Advisor Class (FDYZX - Free Report) , discussed below, is better.
Fidelity Select Computers Portfolio
FDCPX aims for capital appreciation. Fidelity Select Computers Portfolio fund invests the majority of its assets in securities of companies primarily engaged in research, design, development, manufacture or distribution of products and services related to currently available or experimental hardware technology in the computer industry. FDCPX invests in U.S. as well as non-U.S. companies.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, FDCPX has returned 29.5% and 24.7% in the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Computers Portfolio fund, as of the last filing, allocates its assets in the top two major groups; Large Growth and Foreign Stock. Further, as of the last filing, Apple Inc. and Sony Group Corporation were the top holdings for FDCPX.
Sporting a Zacks Mutual Fund Rank #1 (Strong Buy), FDCPX was incepted in July 1985 and is managed by Fidelity. The fund carries an expense ratio of 0.74% and requires no minimal initial investment.
Franklin DynaTech Fund Advisor Class
FDYZX aims for capital appreciation. Franklin DynaTech Fund Advisor Class invests the majority of its assets in common stocks of companies that the fund manager believes are leaders in innovation, take advantage of new technologies, as well as benefit from new industry conditions in a dynamically changing global economy.
This Zacks Sector - Tech product has a history of positive total returns for more than 10 years. Specifically, FDYZX has returned 32.6% and 29.4% in the past three and five years, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Franklin DynaTech Fund Advisor Class, as of the last filing, allocates its assets in the top two major groups; Large Growth and Intermediate Bond. Further, as of the last filing Amazon.com, Inc. and Microsoft Corporation were the top holdings for FDYZX.
This Zacks Rank #1 fund was incepted in November 2010 and carries an expense ratio of 0.60%. It requires no minimal initial investment and is managed by Franklin Templeton.
To Conclude
While both FDCPX and FDYZX carry a Zacks Mutual Fund Rank #1, upon having a closer look, we find that the latter is a clear winner. Not only are FDYZX’s administrative and other operating expenses lower than FDCPX’s, the former has a history of providing stable returns.
Furthermore, FDYZX has a 3-year alpha of 11.45 compared to FDCPX’s 10.02. A higher Jensen’s alpha indicates that managers of the fund, through careful stock selection, have been able to extract higher returns than the market. So, it is only fair to conclude that FDYZX is worth buying as it offers high and stable returns.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
FDCPX Or FDYZX: Which Technology Fund Should You Buy?
Risk lovers seeking healthy returns over a fairly long investment horizon may opt for technology mutual funds. It is believed that the technology sector is poised for a brighter earnings performance than others owing to innovation and greater demand. Improving industry fundamentals and emerging technologies — such as wearables, VR headsets, drones, virtual reality devices and artificial intelligence — are the key catalysts for the sector.
Meanwhile, most mutual funds investing in securities from these sectors prefer a growth-oriented approach that includes focusing on companies with strong fundamentals and a relatively higher investment prospect. Moreover, technology now has broader coverage than just hardware and software companies. Social media and Internet companies are also part of the technology landscape today.
Moreover, technology has come to have a broader meaning than just hardware and software. Social media and Internet companies are now part of the technology landscape. The Technology Select Sector SPDR Fund (XLK) has gained 32.5% over the past year.
Under such circumstances, investing in technology mutual funds seems prudent. However, choosing the right mutual funds for your portfolio can be cumbersome. To that end, let us find out which of the two funds, viz., Fidelity Select Computers Portfolio (FDCPX - Free Report) and Franklin DynaTech Fund Advisor Class (FDYZX - Free Report) , discussed below, is better.
Fidelity Select Computers Portfolio
FDCPX aims for capital appreciation. Fidelity Select Computers Portfolio fund invests the majority of its assets in securities of companies primarily engaged in research, design, development, manufacture or distribution of products and services related to currently available or experimental hardware technology in the computer industry. FDCPX invests in U.S. as well as non-U.S. companies.
This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, FDCPX has returned 29.5% and 24.7% in the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Computers Portfolio fund, as of the last filing, allocates its assets in the top two major groups; Large Growth and Foreign Stock. Further, as of the last filing, Apple Inc. and Sony Group Corporation were the top holdings for FDCPX.
Sporting a Zacks Mutual Fund Rank #1 (Strong Buy), FDCPX was incepted in July 1985 and is managed by Fidelity. The fund carries an expense ratio of 0.74% and requires no minimal initial investment.
Franklin DynaTech Fund Advisor Class
FDYZX aims for capital appreciation. Franklin DynaTech Fund Advisor Class invests the majority of its assets in common stocks of companies that the fund manager believes are leaders in innovation, take advantage of new technologies, as well as benefit from new industry conditions in a dynamically changing global economy.
This Zacks Sector - Tech product has a history of positive total returns for more than 10 years. Specifically, FDYZX has returned 32.6% and 29.4% in the past three and five years, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Franklin DynaTech Fund Advisor Class, as of the last filing, allocates its assets in the top two major groups; Large Growth and Intermediate Bond. Further, as of the last filing Amazon.com, Inc. and Microsoft Corporation were the top holdings for FDYZX.
This Zacks Rank #1 fund was incepted in November 2010 and carries an expense ratio of 0.60%. It requires no minimal initial investment and is managed by Franklin Templeton.
To Conclude
While both FDCPX and FDYZX carry a Zacks Mutual Fund Rank #1, upon having a closer look, we find that the latter is a clear winner. Not only are FDYZX’s administrative and other operating expenses lower than FDCPX’s, the former has a history of providing stable returns.
Furthermore, FDYZX has a 3-year alpha of 11.45 compared to FDCPX’s 10.02. A higher Jensen’s alpha indicates that managers of the fund, through careful stock selection, have been able to extract higher returns than the market. So, it is only fair to conclude that FDYZX is worth buying as it offers high and stable returns.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>