Sector - Finance fund seekers may want to consider taking a look at Fidelity Select FinTech Portfolio (FSVLX). FSVLX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
FSVLX 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
FSVLX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Select FinTech Portfolio debuted in December of 1985. Since then, FSVLX has accumulated assets of about $123.45 million, according to the most recently available information. The fund's current manager, Ruth Nagle, has been in charge of the fund since February of 2022.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 8.52%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.52%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. FSVLX's standard deviation over the past three years is 23.03% compared to the category average of 23.84%. The standard deviation of the fund over the past 5 years is 28.2% compared to the category average of 26.27%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FSVLX has a 5-year beta of 1.36, which means it is likely to be more volatile than the market average. 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 -9.48, which shows that 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, FSVLX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 1.25%. From a cost perspective, FSVLX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, Fidelity Select FinTech Portfolio ( FSVLX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Finance, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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