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Is Fidelity Select Insurance (FSPCX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Sector - Finance category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Select Insurance FSPCX . FSPCX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FSPCX is one of many Sector - Finance funds to choose from. Sector - Finance mutual funds provide investors with a diversified and stabilized investment approach focused on the financial space, which is a notoriously large, complex, and heavily-regulated industry. These funds include everything from insurance companies and exchanges to banks and investment giants; interest rates can impact the players of this space as well.

History of Fund/Manager

Fidelity is responsible for FSPCX, and the company is based out of Boston, MA. The Fidelity Select Insurance made its debut in December of 1985 and FSPCX has managed to accumulate roughly $365.82 million in assets, as of the most recently available information. The fund is currently managed by Peter Deutsch who has been in charge of the fund since June of 2013.

Performance

Of course, investors look for strong performance in funds. FSPCX has a 5-year annualized total return of 17.39% 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 12.16%, 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. FSPCX's standard deviation over the past three years is 12.02% compared to the category average of 15.93%. The standard deviation of the fund over the past 5 years is 11.82% compared to the category average of 13.87%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, FSPCX lost 63.21% and underperformed comparable funds by 2.59%. This means that the fund could possibly be a worse choice than its peers during a down market environment.

Nevertheless, investors should also note that the fund has a 5-year beta of 1.08, 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. With a positive alpha of 0.43, 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, FSPCX is a no load fund. It has an expense ratio of 0.79% compared to the category average of 1.45%. FSPCX is actually cheaper than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, Fidelity Select Insurance has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Insurance looks like 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 - Finance, make sure to go to www.zacks.com/funds/mutual-funds 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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