If investors are looking at the Sector - Tech fund category, MFS Technology Fund A (MTCAX Quick QuoteMTCAX - Free Report) could be a potential option. MTCAX holds a Zacks Mutual Fund Rank of 2 (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 MTCAX 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

MFS is responsible for MTCAX, and the company is based out of Boston, MA. MFS Technology Fund A debuted in January of 1997. Since then, MTCAX has accumulated assets of about $960.46 million, according to the most recently available information. Reinier Dobbelmann is the fund's current manager and has held that role since May of 2022.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 14.34%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 20.25%, 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. MTCAX's standard deviation over the past three years is 21.95% compared to the category average of 14.88%. The fund's standard deviation over the past 5 years is 21.22% compared to the category average of 14.65%. 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 1.18, which means it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -2.79. This means that managers in this portfolio find it difficult to pick 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, MTCAX is a load fund. It has an expense ratio of 1.10% compared to the category average of 0.98%. Looking at the fund from a cost perspective, MTCAX is actually more expensive than its peers.

Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50

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 similar performance, worse downside risk, and higher fees, MFS Technology Fund A ( MTCAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

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