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Is Fidelity Telecom/Utilities Fund (FIUIX) a Strong Mutual Fund Pick Right Now?

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Sector - Utilities fund seekers should consider taking a look at Fidelity Telecom/Utilities Fund (FIUIX - Free Report) . FIUIX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

FIUIX is classified in the Sector - Utilities segment by Zacks, an area full of potential. Sector - Utilities mutual funds focus on companies that provide essential services such as electric power, gas distribution, and water supply to millions of people on a daily basis. Overall, the utility industry is known for its stability and reduced volatility.

History of Fund/Manager

FIUIX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Telecom/Utilities Fund made its debut in November of 1987, and since then, FIUIX has accumulated about $1.56 billion in assets, per the most up-to-date date available. The fund's current manager, Pranay Kirpalani, has been in charge of the fund since December of 2024.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. FIUIX has a 5-year annualized total return of 13.14%, and it sits 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 13.93%, 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. The standard deviation of FIUIX over the past three years is 14.85% compared to the category average of 16.12%. Over the past 5 years, the standard deviation of the fund is 14.54% compared to the category average of 15.86%. 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 0.6, so it is likely going to be less 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. With a positive alpha of 3.28, managers in this portfolio are skilled in picking 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, FIUIX is a no load fund. It has an expense ratio of 0.72% compared to the category average of 0.96%. Looking at the fund from a cost perspective, FIUIX 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 consideration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Telecom/Utilities Fund ( FIUIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Telecom/Utilities Fund ( FIUIX ) looks like a good potential choice for investors right now.

Don't stop here for your research on Sector - Utilities funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FIUIX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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