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Is Fidelity Select Financial Services (FIDSX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Sector - Finance fund could think about starting with Fidelity Select Financial Services (FIDSX - Free Report) . FIDSX carries a Zacks Mutual Fund Rank of 3 (Hold), 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
Fidelity is based in Boston, MA, and is the manager of FIDSX. Fidelity Select Financial Services debuted in December of 1981. Since then, FIDSX has accumulated assets of about $558.94 million, according to the most recently available information. The fund is currently managed by Christopher T. Lee who 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 7.98%, 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 15.21%, 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 16.83%, the standard deviation of FIDSX over the past three years is 14.81%. The fund's standard deviation over the past 5 years is 14.18% compared to the category average of 15.29%. This makes the fund less 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. In FIDSX's case, the fund lost 68.21% in the most recent bear market and underperformed comparable funds by 6.71%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.1, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -3.08, 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 largely on equities that are traded in the United States.
The mutual fund currently has 83.63% of its holdings in stocks, which have an average market capitalization of $72.91 billion. Turnover is 54%, which means this fund makes fewer trades than the average comparable fund.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FIDSX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.42%. So, FIDSX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,500, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Select Financial Services ( FIDSX ) has a neutral Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Your research on the Sector - Finance segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Fidelity Select Financial Services (FIDSX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Sector - Finance fund could think about starting with Fidelity Select Financial Services (FIDSX - Free Report) . FIDSX carries a Zacks Mutual Fund Rank of 3 (Hold), 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
Fidelity is based in Boston, MA, and is the manager of FIDSX. Fidelity Select Financial Services debuted in December of 1981. Since then, FIDSX has accumulated assets of about $558.94 million, according to the most recently available information. The fund is currently managed by Christopher T. Lee who 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 7.98%, 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 15.21%, 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 16.83%, the standard deviation of FIDSX over the past three years is 14.81%. The fund's standard deviation over the past 5 years is 14.18% compared to the category average of 15.29%. This makes the fund less 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. In FIDSX's case, the fund lost 68.21% in the most recent bear market and underperformed comparable funds by 6.71%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.1, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -3.08, 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 largely on equities that are traded in the United States.
The mutual fund currently has 83.63% of its holdings in stocks, which have an average market capitalization of $72.91 billion. Turnover is 54%, which means this fund makes fewer trades than the average comparable fund.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FIDSX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 1.42%. So, FIDSX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,500, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Select Financial Services ( FIDSX ) has a neutral Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Your research on the Sector - Finance segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.