There are plenty of choices in the Sector - Health category, but where should you start your research? Well, one fund that you should consider investigating is Franklin Biotechnology Discovery A (FBDIX). FBDIX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that FBDIX is a Sector - Health fund, and this area is also loaded with various options. Sector - Health mutual funds give investors an opportunity to focus on one of the largest sectors of the American economy, healthcare. Funds in this category can include everything from for-profit hospitals to pharmaceutical companies and medical device manufacturers.
History of Fund/Manager
FBDIX is a part of the Franklin Templeton family of funds, a company based out of San Mateo, CA. Since Franklin Biotechnology Discovery A made its debut in September of 1997, FBDIX has garnered more than $947.78 million in assets. Evan McCulloch is the fund's current manager and has held that role since September of 1997.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 3.75%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.09%, which places it in the middle 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. Over the past three years, FBDIX's standard deviation comes in at 22.82%, compared to the category average of 11.39%. Over the past 5 years, the standard deviation of the fund is 25.11% compared to the category average of 11.17%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In FBDIX's case, the fund lost 25.67% in the most recent bear market and outperformed its peer group by 7.57%. This could mean that the fund is a better choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 1.51, so it is likely going to be more volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -9.07. This means that managers in this portfolio find it difficult to pick 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, FBDIX is a load fund. It has an expense ratio of 1% compared to the category average of 1.29%. FBDIX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Biotechnology Discovery A ( FBDIX ) has a neutral Zacks Mutual Fund rank, similar performance, worse downside risk, and lower fees compared to its peers.
Your research on the Sector - Health 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. 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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