Is Columbia Global Technology Growth A (CTCAX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Sector - Tech funds, consider Columbia Global Technology Growth A (CTCAX) as a possibility. CTCAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that CTCAX 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
Columbia is responsible for CTCAX, and the company is based out of Boston, MA. Since Columbia Global Technology Growth A made its debut in November of 2002, CTCAX has garnered more than $367.01 million in assets. The fund is currently managed by Rahul Narang who has been in charge of the fund since July of 2012.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 21.33%, and it sits 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 24.74%, 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. CTCAX's standard deviation over the past three years is 15.87% compared to the category average of 10.92%. The standard deviation of the fund over the past 5 years is 15.53% compared to the category average of 11.16%. 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. CTCAX lost 56.92% in the most recent bear market and underperformed its peer group by 3%. This might suggest that the fund is a worse choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 1.15, so investors should note that it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a positive alpha of 6.77. This means that managers in this portfolio are skilled in picking 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 primarily on equities that are traded in the United States.
This fund is currently holding about 76.44% stock in stocks, with an average market capitalization of $280.07 billion. This fund's turnover is about 40%, so the fund managers are 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, CTCAX is a load fund. It has an expense ratio of 1.24% compared to the category average of 1.39%. So, CTCAX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Columbia Global Technology Growth A ( CTCAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Columbia Global Technology Growth A ( CTCAX ) looks like a good potential choice for investors right now.
This could just be the start of your research on CTCAXin the Sector - Tech category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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