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Is Fidelity Advisor Biotechnology A (FBTAX) a Strong Mutual Fund Pick Right Now?

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Have you been searching for a Sector - Health fund? You might want to begin with Fidelity Advisor Biotechnology A (FBTAX - Free Report) . FBTAX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes FBTAX as Sector - Health, a segment packed with options. Sector - Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.

History of Fund/Manager

FBTAX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Advisor Biotechnology A debuted in December of 2000. Since then, FBTAX has accumulated assets of about $610.67 million, according to the most recently available information. Eirene Kontopoulos is the fund's current manager and has held that role since July of 2018.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 6.89%, 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 5.83%, 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 10.89%, the standard deviation of FBTAX over the past three years is 22.97%. The fund's standard deviation over the past 5 years is 25.41% compared to the category average of 11.31%. 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. In FBTAX's case, the fund lost 26.12% in the most recent bear market and outperformed its peer group by 7.01%. 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 1.38, so it is likely going to be 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. FBTAX's 5-year performance has produced a negative alpha of -3.31, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, FBTAX is a load fund. It has an expense ratio of 1.02% compared to the category average of 1.28%. So, FBTAX is actually cheaper than its peers from a cost perspective.

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, Fidelity Advisor Biotechnology A ( FBTAX ) has a neutral Zacks Mutual Fund rank, strong performance, worse downside risk, and lower fees compared to its peers.

This could just be the start of your research on FBTAXin the Sector - Health category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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