Any investors hoping to find a Sector - Health fund could think about starting with Fidelity Select Biotechnology (FBIOX Quick QuoteFBIOX - Free Report) . FBIOX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes FBIOX as Sector - Health, a segment packed with options. Sector - Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FBIOX. Since Fidelity Select Biotechnology made its debut in December of 1985, FBIOX has garnered more than $4.64 billion in assets. The fund's current manager, Rajiv Kaul, has been in charge of the fund since October of 2005.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 7.03%, and is in the bottom 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 -2.98%, which places it in the bottom 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, FBIOX's standard deviation comes in at 21.74%, compared to the category average of 17.39%. The standard deviation of the fund over the past 5 years is 22.71% compared to the category average of 17.89%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.74, the fund is likely to be less volatile than 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. The fund has produced a negative alpha over the past 5 years of -2.76, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FBIOX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 1.13%. So, FBIOX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

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

Bottom Line

Overall, even with its comparatively weak performance, average downside risk, and lower fees, Fidelity Select Biotechnology ( FBIOX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.

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