Is Fidelity Advisor Financial Services A (FAFDX) a Strong Mutual Fund Pick Right Now?

Any investors hoping to find a Sector - Finance fund could think about starting with Fidelity Advisor Financial Services A (FAFDX). FAFDX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveFAFDX is one of many Sector - Finance funds to choose from. Sector - Finance mutual funds provide investors with a diversified and stabilized investment approach focused on the financial space, which is a notoriously large, complex, and heavily-regulated industry. These funds include everything from insurance companies and exchanges to banks and investment giants; interest rates can impact the players of this space as well.History of Fund/ManagerFAFDX finds itself in the Fidelity family, based out of Boston, MA. Since Fidelity Advisor Financial Services A made its debut in September of 1996, FAFDX has garnered more than $207.62 million in assets. The fund's current manager, Matt Reed, has been in charge of the fund since June of 2019.PerformanceOf course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.86%, 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 9.07%, which places it in the top 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. The standard deviation of FAFDX over the past three years is 21.4% compared to the category average of 16.06%. The standard deviation of the fund over the past 5 years is 24.6% compared to the category average of 17.24%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsInvestors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FAFDX has a 5-year beta of 1.08, which means it is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -2.4. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.HoldingsExploring 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 mostly on equities that are traded in the United States.This fund is currently holding about 80.08% in stocks, which have an average market capitalization of $105.29 billion. The fund has the heaviest exposure to the following market sectors: Finance Technology Turnover is about 46%, so those in charge of the fund make fewer trades than the average comparable fund.ExpensesAs competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FAFDX is a load fund. It has an expense ratio of 1.05% compared to the category average of 1.01%. So, FAFDX is actually more expensive than its peers from a cost perspective.Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.Bottom LineOverall, even with its comparatively strong performance, worse downside risk, and higher fees, Fidelity Advisor Financial Services A ( FAFDX ) has a high Zacks Mutual Fund rank, and therefore looks 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 FAFDX too for additional information. 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