Is Fidelity Select Consumer Finance (FSVLX) a Strong Mutual Fund Pick Right Now?

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Having trouble finding a Sector – Finance fund? Fidelity Select Consumer Finance (FSVLX) is a potential starting point. FSVLX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

– Zacks

Objective

FSVLX is part of the Sector – Finance section, which boasts an array of other possible selections. Sector – Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. Funds here can include insurance companies and exchanges, as well as banks and investment giants. Investors should note that interest rates may also impact players in this market.

History of Fund/Manager

FSVLX is a part of the Fidelity family of funds, a company based out of Boston, MA. Since Fidelity Select Consumer Finance made its debut in December of 1985, FSVLX has garnered more than $332.98 million in assets. Chuck Culp is the fund’s current manager and has held that role since September of 2018.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. FSVLX has a 5-year annualized total return of 17.61% 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 15.68%, 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. Over the past three years, FSVLX’s standard deviation comes in at 30.42%, compared to the category average of 27.22%. Over the past 5 years, the standard deviation of the fund is 24.22% compared to the category average of 22.37%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.39, so investors should note that 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. FSVLX’s 5-year performance has produced a negative alpha of -4.65, which means managers in this portfolio find it difficult to pick 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, FSVLX is a no load fund. It has an expense ratio of 0.89% compared to the category average of 1.53%. Looking at the fund from a cost perspective, FSVLX is actually cheaper than its peers.

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 Consumer Finance ( FSVLX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Consumer Finance ( FSVLX ) looks like a good potential choice for investors right now.

For additional information on the Sector – Finance area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSVLX too 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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