If you've been stuck searching for Sector - Tech funds, consider Putnam Global Technology A (PGTAX) as a possibility. PGTAX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that PGTAX 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

Franklin is based in San Mateo, CA, and is the manager of PGTAX. Since Putnam Global Technology A made its debut in January of 2009, PGTAX has garnered more than $877.88 million in assets. Di Yao is the fund's current manager and has held that role since December of 2012.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 16.07%, and is in the top 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 32.33%, which places it in the top 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. Compared to the category average of 13.69%, the standard deviation of PGTAX over the past three years is 22.92%. Looking at the past 5 years, the fund's standard deviation is 23.74% compared to the category average of 15.45%. 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 1.32, which means 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. PGTAX's 5-year performance has produced a positive alpha of 1.61, which means managers in this portfolio are skilled in picking 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, PGTAX is a load fund. It has an expense ratio of 1.00% compared to the category average of 0.99%. PGTAX is actually more expensive than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $500 and that each subsequent investment has no minimum amount.

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 strong performance, worse downside risk, and higher fees, Putnam Global Technology A ( PGTAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Sector - Tech, make sure to go to www.zacks.com/funds/mutual-funds 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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This article originally published on Zacks Investment Research (zacks.com).

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