Is Fidelity Select Consumer Staples (FDFAX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Sector - Other category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Select Consumer Staples (FDFAX). FDFAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FDFAX. Since Fidelity Select Consumer Staples made its debut in July of 1985, FDFAX has garnered more than $725.33 million in assets. Ben Shuleva is the fund's current manager and has held that role since January of 2020.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 7.8%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 7.34%, which places it in the bottom 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 10.67%, the standard deviation of FDFAX over the past three years is 11.99%. Looking at the past 5 years, the fund's standard deviation is 14% compared to the category average of 12.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FDFAX has a 5-year beta of 0.51, which means it 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. With a negative alpha of -0.53, 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, FDFAX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 0.91%. From a cost perspective, FDFAX is actually cheaper 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.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Select Consumer Staples ( FDFAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Fidelity Select Consumer Staples ( FDFAX ) looks like a great potential choice for investors right now.

Your research on the Sector - Other segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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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