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

If you've been stuck searching for Sector - Precious Metal funds, consider Fidelity Select Gold Portfolio FSAGX as a possibility. FSAGX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Precious Metal funds is an area filled with options, such as FSAGX. Usually, Sector - Precious Metal mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium. Here, stocks often trade as leveraged bets of the underlying commodity, meaning they're tied to the metal's prices and can be volatile.

History of Fund/Manager

Fidelity is responsible for FSAGX, and the company is based out of Boston, MA. Since Fidelity Select Gold Portfolio made its debut in December of 1985, FSAGX has garnered more than $1.34 billion in assets. The fund's current manager, Joe Wickwire, has been in charge of the fund since August of 2007.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of -13.01%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.13%, 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 37.2% compared to the category average of 14.82%. The standard deviation of the fund over the past 5 years is 37.71% compared to the category average of 37.88%. This makes the fund less 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. In FSAGX's case, the fund lost 29.4% in the most recent bear market and outperformed its peer group by 6.67%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Nevertheless, with a 5-year beta of -0.15, the fund is likely to be less volatile than the market average. 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. FSAGX's 5-year performance has produced a negative alpha of -4.91, which means managers in this portfolio find it difficult to pick 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 0.84% compared to the category average of 1.40%. FSAGX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Select Gold Portfolio FSAGX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on FSAGX in the Sector - Precious Metal 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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