Is Fidelity Select Energy Portfolio (FSENX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Sector - Energy fund category, Fidelity Select Energy Portfolio (FSENX) could be a potential option. FSENX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify FSENX in the Sector - Energy category, an area that is rife with possible choices. Throughout the massive global energy sector, Sector - Energy mutual funds hold a wide range of quickly changing and vitally important industries. While oil and gas comprise the bulk of the exposure, carbon-based fuels will be the biggest group of assets in these funds, though clean energy is starting to pick up steam.

History of Fund/Manager

Fidelity is responsible for FSENX, and the company is based out of Boston, MA. Since Fidelity Select Energy Portfolio made its debut in July of 1981, FSENX has garnered more than $1.77 billion in assets. Kristen Dougherty is the fund's current manager and has held that role since November of 2024.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 31.33%, and is 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 3.35%, which places it in the middle 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. FSENX's standard deviation over the past three years is 17.48% compared to the category average of 20.95%. Over the past 5 years, the standard deviation of the fund is 28.68% compared to the category average of 26.5%. 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 0.76, 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. The fund has produced a positive alpha over the past 5 years of 18.81, which shows that managers in this portfolio are skilled in picking 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, FSENX is a no load fund. It has an expense ratio of 0.65% compared to the category average of 1.18%. FSENX is actually cheaper than its peers when you consider factors like cost.

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 consideration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Select Energy Portfolio ( FSENX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Select Energy Portfolio ( FSENX ) looks like a good potential choice for investors right now.

Your research on the Sector - Energy segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

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This article originally published on Zacks Investment Research (zacks.com).

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