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Is Fidelity Select Defense & Aerospace (FSDAX) a Strong Mutual Fund Pick Right Now?
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Sector - Other fund seekers should consider taking a look at Fidelity Select Defense & Aerospace (FSDAX - Free Report) . FSDAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
FSDAX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Select Defense & Aerospace made its debut in May of 1984 and FSDAX has managed to accumulate roughly $2.26 billion in assets, as of the most recently available information. Jonathan Siegmann is the fund's current manager and has held that role since October of 2015.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular 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 13.84%, 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 13.78%, the standard deviation of FSDAX over the past three years is 15.87%. Over the past 5 years, the standard deviation of the fund is 14.59% compared to the category average of 14.04%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. FSDAX lost 55.25% in the most recent bear market and underperformed comparable funds by 6.84%. This might suggest that the fund is a worse choice than its peers during a bear market.
Investors should note that the fund has a 5-year beta of 1.08, so it is likely going to be more volatile than 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 0.71, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, FSDAX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.15%. So, FSDAX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Select Defense & Aerospace ( FSDAX ) 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.
For additional information on this product, or to compare it to other mutual funds in the Sector - Other, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Fidelity Select Defense & Aerospace (FSDAX) a Strong Mutual Fund Pick Right Now?
Sector - Other fund seekers should consider taking a look at Fidelity Select Defense & Aerospace (FSDAX - Free Report) . FSDAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
FSDAX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Select Defense & Aerospace made its debut in May of 1984 and FSDAX has managed to accumulate roughly $2.26 billion in assets, as of the most recently available information. Jonathan Siegmann is the fund's current manager and has held that role since October of 2015.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular 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 13.84%, 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 13.78%, the standard deviation of FSDAX over the past three years is 15.87%. Over the past 5 years, the standard deviation of the fund is 14.59% compared to the category average of 14.04%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. FSDAX lost 55.25% in the most recent bear market and underperformed comparable funds by 6.84%. This might suggest that the fund is a worse choice than its peers during a bear market.
Investors should note that the fund has a 5-year beta of 1.08, so it is likely going to be more volatile than 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 0.71, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, FSDAX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.15%. So, FSDAX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Select Defense & Aerospace ( FSDAX ) 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.
For additional information on this product, or to compare it to other mutual funds in the Sector - Other, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.