Is MFS Technology Fund A (MTCAX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Mutual Fund Equity Report funds, a place to start could be MFS Technology Fund A (MTCAX). MTCAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
MFS is responsible for MTCAX, and the company is based out of Boston, MA. Since MFS Technology Fund A made its debut in January of 1997, MTCAX has garnered more than $715.85 million in assets. Matthew Sabel is the fund's current manager and has held that role since May of 2011.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 14.16%, and is in the middle 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 3.26%, 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. The standard deviation of MTCAX over the past three years is 22.13% compared to the category average of 15.85%. The standard deviation of the fund over the past 5 years is 22.32% compared to the category average of 16.37%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.07, the fund 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. With a positive alpha of 1.34, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 75.83% of its assets in stocks, with an average market capitalization of $592.09 billion. With turnover at about 44%, this fund is making fewer trades than the average comparable fund.
Expenses
For 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, MTCAX is a load fund. It has an expense ratio of 1.14% compared to the category average of 1%. From a cost perspective, MTCAX is actually more expensive than its peers.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, worse downside risk, and higher fees, MFS Technology Fund A ( MTCAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report 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. 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.
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 (MTCAX): Fund Analysis Report