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Is Fidelity Select Financial Services (FIDSX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Sector - Finance funds, consider Fidelity Select Financial Services (FIDSX - Free Report) as a possibility. FIDSX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FIDSX is classified in the Sector - Finance segment by Zacks, and this area is full of possibilities. The financial space is notoriously large, complex, and heavily-regulated, and Sector - Finance mutual funds give investors a stable, diversified approach to investing in this industry. These funds can include everything from banks and investment giants to exchanges and insurance companies, though investors should note that interest rates could have a big impact.
History of Fund/Manager
FIDSX finds itself in the Fidelity family, based out of Boston, MA. Since Fidelity Select Financial Services made its debut in December of 1981, FIDSX has garnered more than $719.13 million in assets. The fund's current manager, Christopher T. Lee, has been in charge of the fund since May of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 11.05%, and is 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 10.44%, 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. The standard deviation of FIDSX over the past three years is 14.03% compared to the category average of 15.47%. Looking at the past 5 years, the fund's standard deviation is 12.61% compared to the category average of 14.24%. This makes the fund less 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. FIDSX lost 68.21% in the most recent bear market and outperformed its peer group by 7.59%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.1, the fund is likely to be more volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -2.67, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 primarily on equities that are traded in the United States.
The mutual fund currently has 76.86% of its holdings in stocks, which have an average market capitalization of $57.72 billion. Turnover is about 54%, so those in charge of the fund make 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, FIDSX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.43%. FIDSX 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 Select Financial Services ( FIDSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Financial Services ( FIDSX ) looks like a good potential choice for investors right now.
Want even more information about FIDSX? 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. 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 Financial Services (FIDSX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Sector - Finance funds, consider Fidelity Select Financial Services (FIDSX - Free Report) as a possibility. FIDSX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FIDSX is classified in the Sector - Finance segment by Zacks, and this area is full of possibilities. The financial space is notoriously large, complex, and heavily-regulated, and Sector - Finance mutual funds give investors a stable, diversified approach to investing in this industry. These funds can include everything from banks and investment giants to exchanges and insurance companies, though investors should note that interest rates could have a big impact.
History of Fund/Manager
FIDSX finds itself in the Fidelity family, based out of Boston, MA. Since Fidelity Select Financial Services made its debut in December of 1981, FIDSX has garnered more than $719.13 million in assets. The fund's current manager, Christopher T. Lee, has been in charge of the fund since May of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 11.05%, and is 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 10.44%, 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. The standard deviation of FIDSX over the past three years is 14.03% compared to the category average of 15.47%. Looking at the past 5 years, the fund's standard deviation is 12.61% compared to the category average of 14.24%. This makes the fund less 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. FIDSX lost 68.21% in the most recent bear market and outperformed its peer group by 7.59%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.1, the fund is likely to be more volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -2.67, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 primarily on equities that are traded in the United States.
The mutual fund currently has 76.86% of its holdings in stocks, which have an average market capitalization of $57.72 billion. Turnover is about 54%, so those in charge of the fund make 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, FIDSX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.43%. FIDSX 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 Select Financial Services ( FIDSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Financial Services ( FIDSX ) looks like a good potential choice for investors right now.
Want even more information about FIDSX? 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. 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.