Having trouble finding a Sector - Energy fund? Well, Fidelity Advisor Energy Fund M (FAGNX) would not be a good potential starting point right now. FAGNX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FAGNX is one of many Sector - Energy funds to choose from. Sector - Energy mutual funds are comprised of various changing and hugely important industries throughout the massive global energy sector. Even though clean energy is beginning to pick up steam, oil and gas companies have the highest exposure, but carbon-based fuels will be the biggest group of assets in these funds.
History of Fund/Manager
FAGNX finds itself in the Fidelity family, based out of Boston, MA. The Fidelity Advisor Energy Fund M made its debut in December of 1987 and FAGNX has managed to accumulate roughly $95.82 million in assets, as of the most recently available information. The fund's current manager, John Dowd, has been in charge of the fund since May of 2006.
Performance
Investors naturally seek funds with strong performance. FAGNX has a 5-year annualized total return of -5.68% and it sits 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 5.44%, 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, FAGNX's standard deviation comes in at 23.56%, compared to the category average of 11.93%. Looking at the past 5 years, the fund's standard deviation is 22.67% compared to the category average of 12.03%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, FAGNX lost 56.63% and underperformed its peer group by 1.3%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.16, 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. The fund has produced a negative alpha over the past 5 years of -14.62, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FAGNX is a load fund. It has an expense ratio of 1.37% compared to the category average of 1.49%. So, FAGNX 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 Advisor Energy Fund M ( FAGNX ) has a low Zacks Mutual Fund rank, strong performance, worse downside risk, and lower fees compared to its peers.
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