Is Fidelity Select Gold Portfolio (FSAGX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Sector – Precious Metal category, but where should you start your research? Well, one fund that you should consider investigating is Fidelity Select Gold Portfolio (FSAGX). FSAGX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Sector – Precious Metal funds is an area filled with options, such as FSAGX. Usually, Sector – Precious Metal mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium. Here, stocks often trade as leveraged bets of the underlying commodity, meaning they’re tied to the metal’s prices and can be volatile.

History of Fund/Manager

Fidelity is based in Boston, MA, and is the manager of FSAGX. Fidelity Select Gold Portfolio debuted in December of 1985. Since then, FSAGX has accumulated assets of about $1.04 billion, according to the most recently available information. The fund is currently managed by Colin Anderson who has been in charge of the fund since August of 2023.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 7.34%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of -4.43%, 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. Over the past three years, FSAGX’s standard deviation comes in at 31.8%, compared to the category average of 17.18%. Looking at the past 5 years, the fund’s standard deviation is 34.73% compared to the category average of 18.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 0.91, so investors should note that it is hypothetically less 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 negative alpha of -0.38, 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, FSAGX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 1.04%. So, FSAGX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

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

Bottom Line

Overall, even with its comparatively weak performance, worse downside risk, and lower fees, Fidelity Select Gold Portfolio ( FSAGX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.

This could just be the start of your research on FSAGXin the Sector – Precious Metal category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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