There are plenty of choices in the Sector – Tech category, but where should you start your research? Well, one fund that may not be worth investigating is Putnam Global Technology A (PGTAX). PGTAX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
PGTAX 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.
Putnam Funds is responsible for PGTAX, and the company is based out of Canton, MA. Since Putnam Global Technology A made its debut in January of 2009, PGTAX has garnered more than $675.46 million in assets. Di Yao is the fund’s current manager and has held that role since December of 2012.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.28%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 28.93%, 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 PGTAX over the past three years is 19.24% compared to the category average of 12.38%. The fund’s standard deviation over the past 5 years is 21.38% compared to the category average of 14.6%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 1.21, so investors should note that it is hypothetically more volatile than the market at large. 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 negative alpha of -3.82, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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.