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Is Franklin DynaTech Advisor (FDYZX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Sector - Tech funds, consider Franklin DynaTech Advisor (FDYZX - Free Report) as a possibility. FDYZX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

FDYZX 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

Franklin is based in San Mateo, CA, and is the manager of FDYZX. Franklin DynaTech Advisor debuted in November of 2010. Since then, FDYZX has accumulated assets of about $3.94 billion, according to the most recently available information. Rupert H. Johnson Jr. is the fund's current manager and has held that role since November of 2010.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 10.09%, and it sits 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 28.19%, 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. FDYZX's standard deviation over the past three years is 19.29% compared to the category average of 12.26%. The standard deviation of the fund over the past 5 years is 22.27% compared to the category average of 13.91%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.27, so investors should note that 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. With a negative alpha of -6.27, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating 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 primarily on equities that are traded in the United States.

The mutual fund currently has 91.4% of its holdings in stocks, with an average market capitalization of $725.86 billion. The fund has the heaviest exposure to the following market sectors:

  • Technology

With turnover at about 41.52%, this fund is making fewer trades than the average comparable fund.

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, FDYZX is a no load fund and it has an expense ratio of 0.52%.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

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

Bottom Line

This puts this fund from Franklin in the top 40% of all mutual funds we have a rank on right now. As a result, this is likely an excellent choice for investors seeking an option in the Sector - Tech category.

Want even more information about FDYZX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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