Is Fidelity Select Consumer Discretion (FSCPX) a Strong Mutual Fund Pick Right Now?September 27, 2019
There are plenty of choices in the Sector – Other category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity Select Consumer Discretion (FSCPX). FSCPX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSCPX. Fidelity Select Consumer Discretion debuted in June of 1990. Since then, FSCPX has accumulated assets of about $453.90 million, according to the most recently available information. Katherine Shaw is the fund’s current manager and has held that role since August of 2017.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 11.39%, 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 13.05%, 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, FSCPX’s standard deviation comes in at 14.77%, compared to the category average of 14.39%. The fund’s standard deviation over the past 5 years is 14.09% compared to the category average of 14.83%. This makes the fund less volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In FSCPX’s case, the fund lost 49.62% in the most recent bear market and outperformed its peer group by 0%. This makes the fund a possibly on par choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.09, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a positive alpha over the past 5 years of 0.56, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 89.46% of its assets in stocks, with an average market capitalization of $66.89 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 46%, this…