Is Columbia Global Technology Growth Z (CMTFX) a Strong Mutual Fund Pick Right Now?

Sector - Tech fund seekers should consider taking a look at Columbia Global Technology Growth Z (CMTFX). CMTFX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Tech funds is an area filled with options, and CMTFX 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

CMTFX is a part of the Columbia family of funds, a company based out of Kansas City, MO. The Columbia Global Technology Growth Z made its debut in November of 2000 and CMTFX has managed to accumulate roughly $1.98 billion in assets, as of the most recently available information. The fund is currently managed by Rahul Narang who has been in charge of the fund since July of 2012.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 16.21%, and is 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 33%, 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. Compared to the category average of 12.08%, the standard deviation of CMTFX over the past three years is 17.93%. The fund's standard deviation over the past 5 years is 21.42% compared to the category average of 14.25%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.27, the fund 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. With a negative alpha of -1.01, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Exploring 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.

This fund is currently holding about 84.23% in stocks, which have an average market capitalization of $788.90 billion. The fund has the heaviest exposure to the following market sectors:

• Technology

This fund's turnover is about 6%, so the fund managers are making fewer trades than its comparable peers.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, CMTFX is a no load fund. It has an expense ratio of 0.91% compared to the category average of 0.97%. From a cost perspective, CMTFX is actually cheaper than its peers.

While the minimum initial investment for the product is $0, investors should also note that 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.

Bottom Line

Overall, Columbia Global Technology Growth Z ( CMTFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about CMTFX? 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 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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