Any investors hoping to find a Sector - Tech fund could think about starting with Fidelity Select Software & IT Services (FSCSX). FSCSX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that FSCSX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversified approach.

History of Fund/Manager

FSCSX finds itself in the Fidelity family, based out of Boston, MA. Since Fidelity Select Software & IT Services made its debut in July of 1985, FSCSX has garnered more than $6.67 billion in assets. The fund is currently managed by Kevin Francfort who has been in charge of the fund since December of 2024.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.34%, and is in the bottom 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 5.2%, which places it in the bottom third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. FSCSX's standard deviation over the past three years is 25.12% compared to the category average of 20.05%. Looking at the past 5 years, the fund's standard deviation is 23.61% compared to the category average of 23.03%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.17, 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. With a negative alpha of -9.99, managers in this portfolio find it difficult to pick 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, FSCSX is a no load fund. It has an expense ratio of 0.61% compared to the category average of 1.17%. From a cost perspective, FSCSX 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.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively weak performance, average downside risk, and lower fees, Fidelity Select Software & IT Services ( FSCSX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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