Is Columbia Global Technology Growth A (CTCAX) a Strong Mutual Fund Pick Right Now?

Sector - Tech fund seekers should consider taking a look at Columbia Global Technology Growth A (CTCAX). CTCAX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that CTCAX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversified approach.

History of Fund/Manager

Columbia is responsible for CTCAX, and the company is based out of Kansas City, MO. The Columbia Global Technology Growth A made its debut in November of 2002 and CTCAX has managed to accumulate roughly $1.22 billion in assets, as of the most recently available information. Rahul Narang is the fund's current manager and has held that role since July of 2012.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 16.42%, and is 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 28.1%, 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. CTCAX's standard deviation over the past three years is 21.23% compared to the category average of 13.02%. The standard deviation of the fund over the past 5 years is 23.55% compared to the category average of 14.91%. 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 1.35, which means 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. CTCAX has generated a positive alpha over the past five years of 1.48, 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, CTCAX is a load fund. It has an expense ratio of 1.14% compared to the category average of 0.98%. So, CTCAX is actually more expensive than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $2,000 and that 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, Columbia Global Technology Growth A ( CTCAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

Don't stop here for your research on Sector - Tech 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 CTCAX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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

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