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Is Fidelity Select Gold Portfolio (FSAGX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research

Have you been searching for a Sector - Precious Metal fund? You might want to begin with Fidelity Select Gold Portfolio (FSAGX). FSAGX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that FSAGX is a Sector - Precious Metal option, and this area is loaded with different options. Sector - Precious Metal funds typically invest in companies that are involved in the mining and production of precious metals like gold, silver, platinum, and palladium. Because stocks in this environment often trade as leveraged bets of the underlying commodity--they are tied to the prices of the metal--these equities tend to be volatile.

History of Fund/Manager

FSAGX finds itself in the Fidelity family, based out of Boston, MA. Since Fidelity Select Gold Portfolio made its debut in December of 1985, FSAGX has garnered more than $943.89 million in assets. The fund is currently managed by Steven Calhoun who has been in charge of the fund since September of 2018.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of -2.48%, 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 -7.51%, 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. The standard deviation of FSAGX over the past three years is 26.76% compared to the category average of 13.47%. The standard deviation of the fund over the past 5 years is 33.96% compared to the category average of 14.45%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. FSAGX lost 29.4% in the most recent bear market and outperformed its peer group by 6.44%. This could mean that the fund is a better choice than comparable funds during a bear market.

Investors should note that the fund has a 5-year beta of -0.19, so it is likely going to be less volatile than the market at large. 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. With a positive alpha of 4.31, 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, FSAGX is a no load fund. It has an expense ratio of 0.85% compared to the category average of 1.37%. So, FSAGX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $2,500, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Select Gold Portfolio ( FSAGX ) has a neutral Zacks Mutual Fund rank, strong performance, worse downside risk, and lower fees compared to its peers.

For additional information on the Sector - Precious Metal area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSAGX too 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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