Is Fidelity Advisor Technology I (FATIX) A Strong Mutual Fund Pick Right Now?

Sector - Tech fund seekers should consider taking a look at Fidelity Advisor Technology I FATIX. FATIX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Tech funds is an area filled with options, and FATIX 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

FATIX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Advisor Technology I made its debut in September of 1996 and FATIX has managed to accumulate roughly $521.93 million in assets, as of the most recently available information. The fund's current manager, Yun-Min Chai, has been in charge of the fund since May of 2018.

Performance

Investors naturally seek funds with strong performance. FATIX has a 5-year annualized total return of 21.32% and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 21.73%, 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. FATIX's standard deviation over the past three years is 15.14% compared to the category average of 10.27%. The fund's standard deviation over the past 5 years is 13.39% compared to the category average of 13.71%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. FATIX lost 59.65% in the most recent bear market and underperformed comparable funds by 6.85%. This means that the fund could possibly be a worse choice than its peers during a down market environment.

Nevertheless, investors should also note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as 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 4.84, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Investigating 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 principally on equities that are traded in the United States.

Currently, this mutual fund is holding 85.43% stock in stocks, which have an average market capitalization of $312.89 billion.

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, FATIX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 1.37%. Looking at the fund from a cost perspective, FATIX is actually cheaper than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Advisor Technology I has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Sector - Tech funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FATIX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.