Is Macquarie Science & Technology Y (WSTYX) a Strong Mutual Fund Pick Right Now?

If you have been looking for Sector - Tech funds, a place to start could be Macquarie Science & Technology Y (WSTYX). WSTYX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

WSTYX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.

History of Fund/Manager

WSTYX finds itself in the Nomura family, based out of New York, NY. Since Macquarie Science & Technology Y made its debut in June of 1998, WSTYX has garnered more than $475.81 million in assets. The fund is currently managed by Bradley Warden who has been in charge of the fund since October of 2016.

Performance

Of course, investors look for strong performance in funds. WSTYX has a 5-year annualized total return of 19.93%, and it sits in the top 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 41.1%, 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 WSTYX over the past three years is 23.16% compared to the category average of 12.42%. Looking at the past 5 years, the fund's standard deviation is 23.93% compared to the category average of 14.42%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.37, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. WSTYX has generated a positive alpha over the past five years of 3.75, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

As 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, WSTYX is a no load fund. It has an expense ratio of 1.17% compared to the category average of 0.97%. Looking at the fund from a cost perspective, WSTYX is actually more expensive than its peers.

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, even with its comparatively strong performance, worse downside risk, and higher fees, Macquarie Science & Technology Y ( WSTYX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

Your research on the Sector - Tech 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

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

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