If you're looking for a Sector - Tech fund category, then a potential option is Putnam Global Technology A (PGTAX). PGTAX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
PGTAX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.
History of Fund/Manager
Putnam Funds is responsible for PGTAX, and the company is based out of Canton, MA. Putnam Global Technology A made its debut in January of 2009, and since then, PGTAX has accumulated about $604.98 million in assets, per the most up-to-date date available. The fund's current manager, Di Yao, has been in charge of the fund since December of 2012.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 18.93%, and is in the middle 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 12.87%, which places it in the middle 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, PGTAX's standard deviation comes in at 22.74%, compared to the category average of 16.2%. Looking at the past 5 years, the fund's standard deviation is 23.11% compared to the category average of 17.3%. 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 1.09, so it is likely going to be 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 3.06, which means 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, PGTAX is a load fund. It has an expense ratio of 1.07% compared to the category average of 1.01%. From a cost perspective, PGTAX is actually more expensive than its peers.
While the minimum initial investment for the product is $500, investors should also note that there is no minimum for each subsequent investment.
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 similar performance, worse downside risk, and higher fees, Putnam Global Technology A ( PGTAX ) 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 PGTAXin the Sector - Tech 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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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
