Having trouble finding a Sector - Tech fund? Fidelity Select Semiconductors (FSELX) is a potential starting point. FSELX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that FSELX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSELX. Fidelity Select Semiconductors made its debut in July of 1985, and since then, FSELX has accumulated about $20.33 billion in assets, per the most up-to-date date available. The fund's current manager, Adam Benjamin, has been in charge of the fund since March of 2020.
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 32.58%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 19.24%, which places it in the top 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. FSELX's standard deviation over the past three years is 37.33% compared to the category average of 25.24%. Over the past 5 years, the standard deviation of the fund is 32.63% compared to the category average of 25.08%. 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. FSELX has a 5-year beta of 1.41, which means it is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. FSELX has generated a positive alpha over the past five years of 12.43, demonstrating that managers in this portfolio are skilled in picking 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, FSELX is a no load fund. It has an expense ratio of 0.63% compared to the category average of 1.25%. Looking at the fund from a cost perspective, FSELX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while 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, Fidelity Select Semiconductors ( FSELX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, Fidelity Select Semiconductors ( FSELX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Tech, 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
