If you have been looking for Sector – Tech funds, a place to start could be Columbia Global Technology Growth A (CTCAX). CTCAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
The world of Sector – Tech funds is an area filled with options, and CTCAX 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
CTCAX finds itself in the Columbia family, based out of Kansas City, MO. Columbia Global Technology Growth A debuted in November of 2002. Since then, CTCAX has accumulated assets of about $631.06 million, according to the most recently available information. The fund’s current manager, Rahul Narang, has been in charge of the fund since July of 2012.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 29.49%, and it sits 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 24.39%, 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 CTCAX over the past three years is 20.84% compared to the category average of 16.48%. The standard deviation of the fund over the past 5 years is 17.79% compared to the category average of 13.96%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.06, which means it is hypothetically more 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. The fund has produced a positive alpha over the past 5 years of 11.07, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, CTCAX is a load fund. It has an expense ratio of 1.22% compared to the category average of 1.37%. So, CTCAX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.
Overall, Columbia Global Technology Growth A ( CTCAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
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