Is Fidelity Select FinTech Portfolio (FSVLX) a Strong Mutual Fund Pick Right Now?
Sector - Finance fund seekers should consider taking a look at Fidelity Select FinTech Portfolio (FSVLX). FSVLX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
FSVLX is part of the Sector - Finance section, which boasts an array of other possible selections. Sector - Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. Funds here can include insurance companies and exchanges, as well as banks and investment giants. Investors should note that interest rates may also impact players in this market.
History of Fund/Manager
Fidelity is responsible for FSVLX, and the company is based out of Boston, MA. Since Fidelity Select FinTech Portfolio made its debut in December of 1985, FSVLX has garnered more than $111.81 million in assets. The fund's current manager, Ruth Nagle, has been in charge of the fund since February of 2022.
Performance
Of course, investors look for strong performance in funds. FSVLX has a 5-year annualized total return of 6.06% and is in the bottom 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 1.73%, 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. The standard deviation of FSVLX over the past three years is 23.2% compared to the category average of 23.46%. Looking at the past 5 years, the fund's standard deviation is 28.04% compared to the category average of 25.65%. 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 1.32, 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. Over the past 5 years, the fund has a negative alpha of -9.29. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FSVLX is a no load fund. It has an expense ratio of 0.89% compared to the category average of 1.24%. Looking at the fund from a cost perspective, FSVLX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
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 high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
Want even more information about FSVLX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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