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 Banking (FSRBX). FSRBX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

FSRBX is classified in the Sector - Finance segment by Zacks, and this area is full of possibilities. The financial space is notoriously large, complex, and heavily-regulated, and Sector - Finance mutual funds give investors a stable, diversified approach to investing in this industry. These funds can include everything from banks and investment giants to exchanges and insurance companies, though investors should note that interest rates could have a big impact.

History of Fund/Manager

FSRBX is a part of the Fidelity family of funds, a company based out of Boston, MA. Since Fidelity Select Banking made its debut in June of 1986, FSRBX has garnered more than $394.76 million in assets. The fund is currently managed by Matt Reed who has been in charge of the fund since September of 2016.

Performance

Investors naturally seek funds with strong performance. FSRBX has a 5-year annualized total return of 16.25% and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.42%, which places it in the bottom 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. FSRBX's standard deviation over the past three years is 28.4% compared to the category average of 23.83%. Looking at the past 5 years, the fund's standard deviation is 26.39% compared to the category average of 25.78%. 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 0.95, which means it is hypothetically less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a positive alpha of 3.34, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.