Is Fidelity Select Brokerage and Investment Management (FSLBX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research
·3-min read

On the lookout for a Sector - Finance fund? Starting with Fidelity Select Brokerage and Investment Management (FSLBX) is one possibility. FSLBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FSLBX is classified in the Sector - Finance segment by Zacks, and this area is full of possibilities. The financial space is notoriously large, complex, and heavily-regulated, and Sector - Finance mutual funds give investors a stable, diversified approach to investing in this industry. These funds can include everything from banks and investment giants to exchanges and insurance companies, though investors should note that interest rates could have a big impact.

History of Fund/Manager

Fidelity is responsible for FSLBX, and the company is based out of Boston, MA. Fidelity Select Brokerage and Investment Management made its debut in July of 1985, and since then, FSLBX has accumulated about $392 million in assets, per the most up-to-date date available. Charlie Ackerman is the fund's current manager and has held that role since November of 2018.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 16.45%, 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 8.5%, 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. FSLBX's standard deviation over the past three years is 21.14% compared to the category average of 26.07%. The standard deviation of the fund over the past 5 years is 19.22% compared to the category average of 21.96%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FSLBX has a 5-year beta of 1.08, which means it is likely to be more volatile than the market average. 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. With a negative alpha of -0.28, 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, FSLBX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 1.55%. So, FSLBX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Select Brokerage and Investment Management ( FSLBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Your research on the Sector - Finance 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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