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Is Fidelity Select Health Care (FSPHX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Sector - Health fund? Starting with Fidelity Select Health Care (FSPHX - Free Report) is one possibility. FSPHX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Health funds is an area filled with options, such as FSPHX. Healthcare is one of the biggest sectors of the American economy, and Sector - Health mutual funds provide a great opportunity to invest in this industry. Here, funds can include everything from for-profit hospitals to pharmaceutical companies and medical device manufacturers.
History of Fund/Manager
FSPHX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Select Health Care debuted in July of 1981. Since then, FSPHX has accumulated assets of about $7.24 billion, according to the most recently available information. Edward L. Yoon is the fund's current manager and has held that role since October of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 16.61%, and is in the top 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 5.74%, 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 FSPHX over the past three years is 16.06% compared to the category average of 17.32%. Over the past 5 years, the standard deviation of the fund is 14.99% compared to the category average of 16.43%. This makes the fund less 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. In FSPHX's case, the fund lost 39.99% in the most recent bear market and outperformed its peer group by 7.11%. These results could imply that the fund is a better choice than its peers during a sliding 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. FSPHX's 5-year performance has produced a positive alpha of 4.12, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, FSPHX is a no load fund. It has an expense ratio of 0.72% compared to the category average of 1.31%. Looking at the fund from a cost perspective, FSPHX is actually cheaper than its peers.
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 Select Health Care has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Health Care looks like a good potential choice for investors right now.
For additional information on the Sector - Health area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSPHX too 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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Is Fidelity Select Health Care (FSPHX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Sector - Health fund? Starting with Fidelity Select Health Care (FSPHX - Free Report) is one possibility. FSPHX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Health funds is an area filled with options, such as FSPHX. Healthcare is one of the biggest sectors of the American economy, and Sector - Health mutual funds provide a great opportunity to invest in this industry. Here, funds can include everything from for-profit hospitals to pharmaceutical companies and medical device manufacturers.
History of Fund/Manager
FSPHX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Select Health Care debuted in July of 1981. Since then, FSPHX has accumulated assets of about $7.24 billion, according to the most recently available information. Edward L. Yoon is the fund's current manager and has held that role since October of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 16.61%, and is in the top 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 5.74%, 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 FSPHX over the past three years is 16.06% compared to the category average of 17.32%. Over the past 5 years, the standard deviation of the fund is 14.99% compared to the category average of 16.43%. This makes the fund less 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. In FSPHX's case, the fund lost 39.99% in the most recent bear market and outperformed its peer group by 7.11%. These results could imply that the fund is a better choice than its peers during a sliding 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. FSPHX's 5-year performance has produced a positive alpha of 4.12, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, FSPHX is a no load fund. It has an expense ratio of 0.72% compared to the category average of 1.31%. Looking at the fund from a cost perspective, FSPHX is actually cheaper than its peers.
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 Select Health Care has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Health Care looks like a good potential choice for investors right now.
For additional information on the Sector - Health area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSPHX too 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.