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

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If you have been looking for Sector - Health funds, a place to start could be Fidelity Advisor Biotechnology A (FBTAX - Free Report) . FBTAX carries a Zacks Mutual Fund Rank of 2 (Buy), 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

Fidelity is based in Boston, MA, and is the manager of FBTAX. Fidelity Advisor Biotechnology A debuted in December of 2000. Since then, FBTAX has accumulated assets of about $633.59 million, according to the most recently available information. The fund is currently managed by Eirene Kontopoulos who has been in charge of the fund since July of 2018.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 5.04%, 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 11.98%, 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 FBTAX over the past three years is 21.28% compared to the category average of 11.55%. Over the past 5 years, the standard deviation of the fund is 25.38% compared to the category average of 11.69%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, FBTAX lost 26.12% and outperformed its peer group by 8%. These results could imply that the fund is a better choice than its peers during a sliding market environment.

Even still, the fund has a 5-year beta of 1.35, so investors should note that it is hypothetically 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. FBTAX's 5-year performance has produced a negative alpha of -6.22, which means managers in this portfolio find it difficult to pick 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, FBTAX is a load fund. It has an expense ratio of 1.03% compared to the category average of 1.36%. From a cost perspective, FBTAX is actually cheaper than its peers.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Advisor Biotechnology A ( FBTAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about FBTAX? 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. 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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