Is Fidelity Real Estate Income (FRIFX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Sector - Real Estate fund category, Fidelity Real Estate Income (FRIFX) could be a potential option. FRIFX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveFRIFX is one of many Sector - Real Estate funds to choose from. Sector - Real Estate mutual funds are known to invest in real estate investment trusts (REITs). A popular income vehicle thanks to its taxation rules, a REIT is required to pay out at least 90% of its income annually to avoid double taxation. This technique makes securities in these funds high dividend players, and even bond-like in some instances, though their risk is similar to equities.History of Fund/ManagerFRIFX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Real Estate Income made its debut in February of 2003, and since then, FRIFX has accumulated about $1.15 billion in assets, per the most up-to-date date available. Bill Maclay is the fund's current manager and has held that role since March of 2019.PerformanceInvestors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 4.24%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 2.38%, 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. Compared to the category average of 12.67%, the standard deviation of FRIFX over the past three years is 10.03%. Over the past 5 years, the standard deviation of the fund is 15.07% compared to the category average of 12.76%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsInvestors should note that the fund has a 5-year beta of 0.66, which means it is hypothetically less 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. With a negative alpha of -6.16, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.ExpensesFor 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, FRIFX is a no load fund. It has an expense ratio of 0.72% compared to the category average of 0.83%. So, FRIFX is actually cheaper than its peers from a cost perspective.While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.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 weak performance, average downside risk, and lower fees, Fidelity Real Estate Income ( FRIFX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.Don't stop here for your research on Sector - Real Estate funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FRIFX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FRIFX): Fund Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks