Is Columbia Global Technology Growth A (CTCAX) a Strong Mutual Fund Pick Right Now?

On the lookout for a Sector - Tech fund? Starting with Columbia Global Technology Growth A (CTCAX) is one possibility. CTCAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

CTCAX 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.

History of Fund/Manager

CTCAX is a part of the Columbia family of funds, a company based out of Kansas City, MO. The Columbia Global Technology Growth A made its debut in November of 2002 and CTCAX has managed to accumulate roughly $1.09 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

Obviously, what investors are looking for in these funds is strong performance relative to their peers. CTCAX has a 5-year annualized total return of 15.92%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 32.67%, 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. The standard deviation of CTCAX over the past three years is 17.93% compared to the category average of 12.82%. Over the past 5 years, the standard deviation of the fund is 21.42% compared to the category average of 14.36%. 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. Over the past 5 years, the fund has a negative alpha of -1.26. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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.

The mutual fund currently has 84.26% of its holdings in stocks, and these companies have an average market capitalization of $788.90 billion. The fund has the heaviest exposure to the following market sectors:

• Technology

Turnover is 6%, which means this fund makes fewer trades than its comparable peers.

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, CTCAX is a load fund and it has an expense ratio of 1.16%.

This fund requires a minimum initial investment of $2,000, 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.

Bottom Line

This puts this fund from Columbia in the top 20% of all mutual funds we have a rank on right now. As a result, this is likely an excellent choice for investors seeking an option in the Sector - Tech category.

For additional information on the Sector - Tech 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 CTCAX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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