Is Fidelity Select Medical Equipment & Systems (FSMEX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Health fund? Fidelity Select Medical Equipment & Systems (FSMEX) is a potential starting point. FSMEX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Health funds is an area filled with options, such as FSMEX. Healthcare is one of the biggest sectors of the American economy, and Sector - Health mutual funds provide a great opportunity to invest in this industry. Here, funds can include everything from for-profit hospitals to pharmaceutical companies and medical device manufacturers.
History of Fund/Manager
Fidelity is responsible for FSMEX, and the company is based out of Boston, MA. Since Fidelity Select Medical Equipment & Systems made its debut in April of 1998, FSMEX has garnered more than $9.02 billion in assets. The fund is currently managed by Edward Yoon who has been in charge of the fund since May of 2007.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 22.15%, and it sits 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 22.4%, 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. FSMEX's standard deviation over the past three years is 18.71% compared to the category average of 19.2%. The standard deviation of the fund over the past 5 years is 16.84% compared to the category average of 17.34%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.82, which means 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 positive alpha of 7.71, 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, FSMEX is a no load fund. It has an expense ratio of 0.70% compared to the category average of 1.32%. So, FSMEX 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.
Bottom Line
Overall, Fidelity Select Medical Equipment & Systems ( FSMEX ) 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 - Health 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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