Is Fidelity Select Financial Services (FIDSX) a Strong Mutual Fund Pick Right Now?

On the lookout for a Sector - Finance fund? Starting with Fidelity Select Financial Services (FIDSX) is one possibility. FIDSX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

FIDSX is classified in the Sector - Finance segment by Zacks, and this area is full of possibilities. The financial space is notoriously large, complex, and heavily-regulated, and Sector - Finance mutual funds give investors a stable, diversified approach to investing in this industry. These funds can include everything from banks and investment giants to exchanges and insurance companies, though investors should note that interest rates could have a big impact.

History of Fund/Manager

FIDSX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Select Financial Services made its debut in December of 1981 and FIDSX has managed to accumulate roughly $980.10 million in assets, as of the most recently available information. The fund's current manager, Matt Reed, has been in charge of the fund since June of 2019.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 13.12%, and is in the top 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 16.07%, which places it in the middle 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. Over the past three years, FIDSX's standard deviation comes in at 18.39%, compared to the category average of 20.48%. The standard deviation of the fund over the past 5 years is 19.29% compared to the category average of 21.35%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.93, which means it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. FIDSX's 5-year performance has produced a positive alpha of 0.51, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

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, FIDSX is a no load fund. It has an expense ratio of 0.69% compared to the category average of 1.13%. FIDSX is actually cheaper than its peers when you consider factors like cost.

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 Financial Services ( FIDSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Financial Services ( FIDSX ) looks like a good potential choice for investors right now.

Want even more information about FIDSX? 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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