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Is Fidelity Real Estate Investment (FRESX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Sector - Real Estate fund? Starting with Fidelity Real Estate Investment (FRESX - Free Report) is one possibility. FRESX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FRESX is Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players--almost bond-like in some cases--though their risk is similar to equities.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FRESX. Fidelity Real Estate Investment made its debut in November of 1986 and since then, FRESX has accumulated about $4.21 billion in assets, per the most up-to-date date available. The fund's current manager, Steve J. Buller, has been in charge of the fund since December of 1997.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.48%, and it sits 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 5.99%, which places it in the top third during this time-frame.
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 FRESX over the past three years is 13.46% compared to the category average of 11.71%. The standard deviation of the fund over the past 5 years is 13.64% compared to the category average of 12.29%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. FRESX lost 66.81% in the most recent bear market and underperformed comparable funds by 2.81%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FRESX has a 5-year beta of 0.6, which means it is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. FRESX has generated a positive alpha over the past five years of 0.78, demonstrating that managers in this portfolio are skilled in picking 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 principally on equities that are traded in the United States.
Right now, 97.55% of this mutual fund's holdings are stocks, with an average market capitalization of $20.48 billion. Turnover is 15%, which means this fund makes fewer trades than its comparable peers.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FRESX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.26%. FRESX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Real Estate Investment FRESX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Want even more information about FRESX? 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. 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 Fidelity Real Estate Investment (FRESX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Sector - Real Estate fund? Starting with Fidelity Real Estate Investment (FRESX - Free Report) is one possibility. FRESX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FRESX is Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players--almost bond-like in some cases--though their risk is similar to equities.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FRESX. Fidelity Real Estate Investment made its debut in November of 1986 and since then, FRESX has accumulated about $4.21 billion in assets, per the most up-to-date date available. The fund's current manager, Steve J. Buller, has been in charge of the fund since December of 1997.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.48%, and it sits 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 5.99%, which places it in the top third during this time-frame.
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 FRESX over the past three years is 13.46% compared to the category average of 11.71%. The standard deviation of the fund over the past 5 years is 13.64% compared to the category average of 12.29%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. FRESX lost 66.81% in the most recent bear market and underperformed comparable funds by 2.81%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FRESX has a 5-year beta of 0.6, which means it is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. FRESX has generated a positive alpha over the past five years of 0.78, demonstrating that managers in this portfolio are skilled in picking 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 principally on equities that are traded in the United States.
Right now, 97.55% of this mutual fund's holdings are stocks, with an average market capitalization of $20.48 billion. Turnover is 15%, which means this fund makes fewer trades than its comparable peers.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FRESX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.26%. FRESX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Real Estate Investment FRESX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Want even more information about FRESX? 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.