Any investors hoping to find a Sector – Tech fund could think about starting with MFS Technology Fund A (MTCAX). MTCAX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Sector – Tech funds is an area filled with options, and MTCAX is one of them. Sector – Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
MFS is based in Boston, MA, and is the manager of MTCAX. MFS Technology Fund A made its debut in January of 1997, and since then, MTCAX has accumulated about $1.22 billion in assets, per the most up-to-date date available. Reinier Dobbelmann is the fund’s current manager and has held that role since May of 2022.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 15.03%, and it sits in the middle 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 31.86%, 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. Compared to the category average of 11.91%, the standard deviation of MTCAX over the past three years is 20.23%. The fund’s standard deviation over the past 5 years is 22.04% compared to the category average of 13.85%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. MTCAX has a 5-year beta of 1.27, which means it is likely to be more volatile than the market average. 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. With a negative alpha of -0.84, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.