Sector – Tech fund seekers should consider taking a look at Columbia Seligman Technology & Information A (SLMCX). SLMCX has a Zacks Mutual Fund Rank of 1 (Strong Buy), 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 SLMCX 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
Columbia is based in Kansas City, MO, and is the manager of SLMCX. Since Columbia Seligman Technology & Information A made its debut in June of 1983, SLMCX has garnered more than $11.31 billion in assets. A team of investment professionals is the fund’s current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 20.75%, and it sits 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 34.91%, 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. SLMCX’s standard deviation over the past three years is 20.52% compared to the category average of 12.58%. The standard deviation of the fund over the past 5 years is 22.84% compared to the category average of 14.11%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.32, the fund is likely to be more volatile than the market average. 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 positive alpha of 2.6, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SLMCX is a load fund and it has an expense ratio of 1.15%.