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

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Sector - Tech fund seekers should consider taking a look at Franklin DynaTech Adviser (FDYZX - Free Report) . FDYZX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine 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 Templeton is based in San Mateo, CA, and is the manager of FDYZX. The Franklin DynaTech Adviser made its debut in November of 2010 and FDYZX has managed to accumulate roughly $375.06 million in assets, as of the most recently available information. The fund's current manager, Rupert H. Johnson, has been in charge of the fund 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 18.97%, 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 16.44%, 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. FDYZX's standard deviation over the past three years is 13.92% compared to the category average of 10.02%. Over the past 5 years, the standard deviation of the fund is 13.38% compared to the category average of 9.82%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment.

Nevertheless, with a 5-year beta of 1.07, the fund is likely to be more 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. With a positive alpha of 3.24, 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 largely on equities that are traded in the United States.

As of the last filing date, the mutual fund has 95.93% of its assets in stocks, which have an average market capitalization of $192.94 billion. With turnover at about 19.85%, this fund is making fewer trades than its comparable peers.

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, FDYZX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.36%. FDYZX is actually cheaper than its peers when you consider factors like cost.

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

Bottom Line

Overall, Franklin DynaTech Adviser has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Sector - Tech 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 FDYZX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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