(Yahoo!) -- If investors are looking at the Sector - Tech fund category, make sure to pass over Fidelity Advisor Technology C (FTHCX). FTHCX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
The world of Sector - Tech funds is an area filled with options, and FTHCX is one of them. Sector - Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach.
Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
FTHCX finds itself in the Fidelity family, based out of Boston, MA. Since Fidelity Advisor Technology C made its debut in November of 1997, FTHCX has garnered more than $248.27 million in assets.
Yun-Min Chai is the fund's current manager and has held that role since January of 2005.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FTHCX has a 5-year annualized total return of 17.93% 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 25.86%, 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. Over the past three years, FTHCX's standard deviation comes in at 16.27%, compared to the category average of 10.63%. The fund's standard deviation over the past 5 years is 15.98% compared to the category average of 10.99%. This makes the fund more volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, FTHCX lost 60.19% and underperformed its peer group by 6.86%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FTHCX has a 5-year beta of 1.19, which means it is likely to be more 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.
Over the past 5 years, the fund has a positive alpha of 4.25. This means 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 91.65% stock in stocks, with an average market capitalization of $353.79 billion. This fund's turnover is about 169%, so the fund managers are making fewer trades than the average comparable fund.
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, FTHCX is a no-load fund. It has an expense ratio of 1.78% compared to the category average of 1.31%. From a cost perspective, FTHCX is actually more expensive 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.