If you’re looking for a Sector – Tech fund category, then a potential option is Fidelity Advisor Technology M (FATEX). FATEX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
FATEX is part of the Sector – Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector – Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.
Fidelity is based in Boston, MA, and is the manager of FATEX. Since Fidelity Advisor Technology M made its debut in September of 1996, FATEX has garnered more than $1.02 billion in assets. The fund’s current manager, Adam Benjamin, has been in charge of the fund since July of 2020.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 22.33%, 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 38.54%, which places it in the top 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. FATEX’s standard deviation over the past three years is 20.85% compared to the category average of 13.76%. Over the past 5 years, the standard deviation of the fund is 23.26% compared to the category average of 15.37%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.32, so it is likely going to be more 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. FATEX has generated a positive alpha over the past five years of 0.95, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Examining 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.
Currently, this mutual fund is holding 81.11% in stocks, and these companies have an average market capitalization of $746.78 billion. The fund has the heaviest exposure to the following market sectors:
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Technology
Turnover is 50%, which means, on average, the fund makes fewer trades than comparable funds.
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, FATEX is a load fund. It has an expense ratio of 1.17% compared to the category average of 1.01%. So, FATEX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Overall, even with its comparatively strong performance, worse downside risk, and higher fees, Fidelity Advisor Technology M ( FATEX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
This could just be the start of your research on FATEX in 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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This article originally published on Zacks Investment Research (zacks.com).