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Is Putnam Global Technology A (PGTAX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Sector - Tech category, but where should you start your research? Well, one fund that may not be worth investigating is Putnam Global Technology A (PGTAX - Free Report) . PGTAX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
PGTAX 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
Putnam Funds is responsible for PGTAX, and the company is based out of Canton, MA. Since Putnam Global Technology A made its debut in January of 2009, PGTAX has garnered more than $675.46 million in assets. Di Yao is the fund's current manager and has held that role since December of 2012.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.28%, 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 28.93%, which places it in the middle 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 PGTAX over the past three years is 19.24% compared to the category average of 12.38%. The fund's standard deviation over the past 5 years is 21.38% compared to the category average of 14.6%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.21, 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 -3.82, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 83.71% in stocks, which have an average market capitalization of $1.03 trillion. The fund has the heaviest exposure to the following market sectors:
Technology
Turnover is 66%, which means, on average, the fund makes fewer trades than comparable funds.
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, PGTAX is a load fund. It has an expense ratio of 1.04% compared to the category average of 0.98%. So, PGTAX is actually more expensive than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $500; 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
Overall, Putnam Global Technology A ( PGTAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and higher fees, Putnam Global Technology A ( PGTAX ) looks like a poor potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Tech, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is Putnam Global Technology A (PGTAX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Sector - Tech category, but where should you start your research? Well, one fund that may not be worth investigating is Putnam Global Technology A (PGTAX - Free Report) . PGTAX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
PGTAX 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
Putnam Funds is responsible for PGTAX, and the company is based out of Canton, MA. Since Putnam Global Technology A made its debut in January of 2009, PGTAX has garnered more than $675.46 million in assets. Di Yao is the fund's current manager and has held that role since December of 2012.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.28%, 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 28.93%, which places it in the middle 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 PGTAX over the past three years is 19.24% compared to the category average of 12.38%. The fund's standard deviation over the past 5 years is 21.38% compared to the category average of 14.6%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.21, 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 -3.82, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 83.71% in stocks, which have an average market capitalization of $1.03 trillion. The fund has the heaviest exposure to the following market sectors:
Turnover is 66%, which means, on average, the fund makes fewer trades than comparable funds.
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, PGTAX is a load fund. It has an expense ratio of 1.04% compared to the category average of 0.98%. So, PGTAX is actually more expensive than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $500; 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
Overall, Putnam Global Technology A ( PGTAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and higher fees, Putnam Global Technology A ( PGTAX ) looks like a poor potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Tech, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.