We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Fidelity Select Materials (FSDPX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
Having trouble finding a Sector - Energy fund? Fidelity Select Materials (FSDPX - Free Report) is a possible starting point. FSDPX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FSDPX as Sector - Energy, a segment packed with options. Sector - Energy mutual funds encompass a wide range of vastly changing and vitally important industries throughout this massive global sector. Oil and gas comprise the bulk of the exposure here, and carbon-based fuels are going to be the majority of assets in these funds. However, clean energy is starting to pick up steam.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSDPX. The Fidelity Select Materials made its debut in September of 1986 and FSDPX has managed to accumulate roughly $333.49 million in assets, as of the most recently available information. Richard Malnight is the fund's current manager and has held that role since November of 2017.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of -4.1%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of -9.51%, 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 FSDPX over the past three years is 19.58% compared to the category average of 14.78%. The standard deviation of the fund over the past 5 years is 18.96% compared to the category average of 13.7%. 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 FSDPX's case, the fund lost 53.72% in the most recent bear market and outperformed its peer group by 2%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.22, 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. FSDPX has generated a negative alpha over the past five years of -10.65, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 94.82% of its assets in stocks, and these companies have an average market capitalization of $35.58 billion. The fund has the heaviest exposure to the following market sectors:
Industrial Cyclical
Other
Non-Durable
With turnover at about 77%, this fund is making fewer trades than the average comparable fund.
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, FSDPX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.58%. FSDPX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Select Materials ( FSDPX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Your research on the Sector - Energy 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. 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Fidelity Select Materials (FSDPX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Energy fund? Fidelity Select Materials (FSDPX - Free Report) is a possible starting point. FSDPX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FSDPX as Sector - Energy, a segment packed with options. Sector - Energy mutual funds encompass a wide range of vastly changing and vitally important industries throughout this massive global sector. Oil and gas comprise the bulk of the exposure here, and carbon-based fuels are going to be the majority of assets in these funds. However, clean energy is starting to pick up steam.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSDPX. The Fidelity Select Materials made its debut in September of 1986 and FSDPX has managed to accumulate roughly $333.49 million in assets, as of the most recently available information. Richard Malnight is the fund's current manager and has held that role since November of 2017.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of -4.1%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of -9.51%, 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 FSDPX over the past three years is 19.58% compared to the category average of 14.78%. The standard deviation of the fund over the past 5 years is 18.96% compared to the category average of 13.7%. 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 FSDPX's case, the fund lost 53.72% in the most recent bear market and outperformed its peer group by 2%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.22, 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. FSDPX has generated a negative alpha over the past five years of -10.65, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 94.82% of its assets in stocks, and these companies have an average market capitalization of $35.58 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
- Other
- Non-Durable
With turnover at about 77%, this fund is making fewer trades than the average comparable fund.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, FSDPX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.58%. FSDPX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Select Materials ( FSDPX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Your research on the Sector - Energy 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. 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.