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

Objective

The world of Sector - Tech funds is an area filled with options, and FSPTX 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

Fidelity is based in Boston, MA, and is the manager of FSPTX. Fidelity Select Technology debuted in July of 1981. Since then, FSPTX has accumulated assets of about $16.05 billion, according to the most recently available information. The fund's current manager, Adam Benjamin, has been in charge of the fund since January of 2022.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 24.28%, 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 11.36%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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, FSPTX's standard deviation comes in at 25.54%, compared to the category average of 25.79%. The standard deviation of the fund over the past 5 years is 24.07% compared to the category average of 25.17%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.2, so it is likely going to be more volatile than the market at large. 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. FSPTX's 5-year performance has produced a positive alpha of 6.66, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.

Currently, this mutual fund is holding 84.01% in stocks, with an average market capitalization of $1.02 trillion. Turnover is 29%, which means, on average, the fund makes fewer trades than the average comparable fund.

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, FSPTX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 1.24%. From a cost perspective, FSPTX is actually cheaper than its peers.

While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Select Technology ( FSPTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Technology ( FSPTX ) 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 FSPTX too for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.