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Is Columbia Global Technology Growth A (CTCAX) a Strong Mutual Fund Pick Right Now?

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Looking for a Sector - Tech fund? You may want to consider Columbia Global Technology Growth A (CTCAX - Free Report) as a possible option. CTCAX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

CTCAX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.

History of Fund/Manager

CTCAX is a part of the Columbia family of funds, a company based out of Kansas City, MO. Columbia Global Technology Growth A made its debut in November of 2002, and since then, CTCAX has accumulated about $1.01 billion in assets, per the most up-to-date date available. The fund's current manager, Rahul Narang, has been in charge of the fund since July of 2012.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 17.79%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 25.55%, 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, CTCAX's standard deviation comes in at 21.64%, compared to the category average of 15.92%. The fund's standard deviation over the past 5 years is 22.21% compared to the category average of 15.55%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.24, the fund is likely to be more volatile than the market average. 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. CTCAX has generated a negative alpha over the past five years of -0.36, demonstrating that managers in this portfolio find it difficult to pick 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 principally on equities that are traded in the United States.

This fund is currently holding about 97.53% in stocks, with an average market capitalization of $679.38 billion.

Turnover is 6%, which means, on average, the fund makes fewer trades than its comparable peers.

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, CTCAX is a load fund. It has an expense ratio of 1.16% compared to the category average of 1.01%. Looking at the fund from a cost perspective, CTCAX is actually more expensive than its peers.

This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.

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

Bottom Line

Overall, even with its comparatively strong performance, worse downside risk, and higher fees, Columbia Global Technology Growth A ( CTCAX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.

Your research on the Sector - Tech segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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