Is Fidelity Select Electronics (FSELX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Sector – Tech funds, a place to start could be Fidelity Select Electronics (FSELX). FSELX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

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Objective

FSELX 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

Fidelity is based in Boston, MA, and is the manager of FSELX. Fidelity Select Electronics made its debut in July of 1985, and since then, FSELX has accumulated about $4.96 billion in assets, per the most up-to-date date available. The fund is currently managed by Adam Benjamin who has been in charge of the fund since March of 2020.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 28.45%, 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 25.49%, 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. The standard deviation of FSELX over the past three years is 27.56% compared to the category average of 22.27%. The fund’s standard deviation over the past 5 years is 23.66% compared to the category average of 19.41%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.3, the fund is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a positive alpha of 10.22. This means that 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, FSELX is a no load fund. It has an expense ratio of 0.69% compared to the category average of 1.38%. From a cost perspective, FSELX 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.

Bottom Line

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

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 FSELX 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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