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 Columbia Seligman Global Technology A (
SHGTX Quick Quote SHGTX - Free Report) . SHGTX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance. Objective
The world of Sector - Tech funds is an area filled with options, and SHGTX is one of them. Sector - Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
SHGTX is a part of the Columbia family of funds, a company based out of Boston, MA. Since Columbia Seligman Global Technology A made its debut in May of 1994, SHGTX has garnered more than $776.87 million in assets. A team of investment professionals is the fund's current manager.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 22.39%, and is 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 22.47%, 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. Compared to the category average of 9.67%, the standard deviation of SHGTX over the past three years is 15.34%. Over the past 5 years, the standard deviation of the fund is 13.14% compared to the category average of 9.33%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In SHGTX's case, the fund lost 45.2% in the most recent bear market and outperformed its peer group by 7.73%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Investors should note that the fund has a 5-year beta of 0.98, so it is likely going to be as volatile as the market at large. 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. The fund has produced a positive alpha over the past 5 years of 6.43, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, SHGTX is a load fund. It has an expense ratio of 1.33% compared to the category average of 1.28%. From a cost perspective, SHGTX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,000, investors should also note that there is no minimum for each subsequent investment.
Overall, Columbia Seligman Global Technology A has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, Columbia Seligman Global Technology A looks like a poor potential choice for investors right now.
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