Any investors hoping to find a Sector - Tech fund could think about starting with Columbia Seligman Technology & Information A (SLMCX). SLMCX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that SLMCX 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
SLMCX finds itself in the Columbia family, based out of Kansas City, MO. Columbia Seligman Technology & Information A debuted in June of 1983. Since then, SLMCX has accumulated assets of about $14.82 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. SLMCX has a 5-year annualized total return of 23.49%, 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 39.37%, 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. Compared to the category average of 12.73%, the standard deviation of SLMCX over the past three years is 24.99%. The standard deviation of the fund over the past 5 years is 25.81% compared to the category average of 14.61%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.42, 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. SLMCX has generated a positive alpha over the past five years of 7.61, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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 principally on equities that are traded in the United States.
Currently, this mutual fund is holding 76.28% in stocks, which have an average market capitalization of $416.89 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 33%, which means, on average, the fund makes fewer trades than comparable funds.
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, SLMCX is a load fund. It has an expense ratio of 1.15% compared to the category average of 0.98%. Looking at the fund from a cost perspective, SLMCX is actually more expensive than its peers.
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 Seligman Technology & Information A ( SLMCX ) 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant 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 (SLMCX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
