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

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There are plenty of choices in the Sector – Tech category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Advisor Technology I (FATIX). FATIX carries 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

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

Fidelity is based in Boston, MA, and is the manager of FATIX. Since Fidelity Advisor Technology I made its debut in September of 1996, FATIX has garnered more than $1.44 billion in assets. The fund is currently managed by Adam Benjamin who has been in charge of the fund since July of 2020.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 30.48%, and is 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 29.65%, 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 23.72% compared to the category average of 16.83%. The standard deviation of the fund over the past 5 years is 19.75% compared to the category average of 13.99%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.13, so investors should note that it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a positive alpha of 10.42, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FATIX is a no load fund. It has an expense ratio of 0.73% compared to the category average of 1.35%. So, FATIX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

Bottom Line

Overall, Fidelity Advisor Technology I ( FATIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, Fidelity Advisor Technology I ( FATIX ) looks like a good potential choice for investors right now.

Your research on the Sector – Tech 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

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