Is Fidelity Select Financial Services (FIDSX) a great choice for mutual funds right now?
On looking for a Sector – Finance fund? Starting with Fidelity Select Financial Services (FIDSX) is a possibility. FIDSX carries a Zacks mutual fund ranking of 1 (strong buy), which is based on nine forecasting factors such as size, cost, and past performance.
FIDSX is one of the many Industry – Finance funds to choose from. Sector Mutual Funds – Finance offer investors a diversified and stabilized approach to investing focused on the financial space, which is a notoriously large, complex and highly regulated industry. These funds include everything from insurance companies and stock exchanges to banks and investment giants; interest rates can also have an impact on players in this space.
Fund History / Manager
Fidelity is responsible for FIDSX, and the company is based in Boston, MA. Fidelity Select Financial Services debuted in December 1981. Since then, FIDSX has accumulated assets of approximately $ 851.04 million, according to the latest information available. The fund is currently managed by Matt Reed who has been in charge of the fund since June 2019.
Investors naturally look for high performance funds. FIDSX has a 5-year annualized total return of 15.33% and is in the top third of its category peers. If you’re interested in shorter time frames, don’t overlook the fund’s 3-year total annualized return of 12.47%, which puts it in the top third over that time frame.
When looking at the performance of a fund, it is also important to note the standard deviation of returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, the standard deviation of FIDSX stands at 26.44%, compared to the category average of 27.22%. The fund’s standard deviation over the past 5 years is 21.78% compared to the category average of 22.37%. This makes the fund less volatile than its peers over the past half decade.
With a 5-year beta of 1.23, the fund is expected to be more volatile than the market average. Since alpha represents the performance of a portfolio on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, it is worth paying attention to this metric as well. The fund has produced negative alpha over the past 5 years of -4.16, which shows that the managers of this portfolio are struggling to select stocks that generate higher returns than the benchmark.
Investigating the stock holdings of a mutual fund is also a valuable exercise. This can show us how the manager applies his stated methodology, as well as whether there are inherent biases in his approach. For this particular fund, the focus is primarily on stocks traded in the United States.
Currently, this mutual fund owns 85.82% of stocks, which have an average market capitalization of $ 79.30 billion. The turnover of this fund is around 63%, so the fund managers trade less than the average for comparable funds.
For investors, it is essential to take a closer look at the parameters related to costs, as costs are increasingly important for investments in mutual funds. Competition is intensifying in this space, and a lower cost product is likely to outperform its otherwise identical counterpart, all other things being equal. In terms of fees, FIDSX is a no-load fund. It has an expense ratio of 0.77% compared to the category average of 1.53%. Looking at the fund from a cost perspective, FIDSX is actually less expensive than its peers.
Although the minimum initial investment for the product is $ 0, investors should also note that there is no minimum for each subsequent investment.
Overall, Fidelity Select Financial Services (FIDSX) ranks high for Zacks mutual funds, and in conjunction with its comparatively strong performance, medium downside risk, and lower fees, Fidelity Select Financial Services (FIDSX ) seems to be a good potential choice for investors. now.
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