On the lookout for a Sector – Tech fund? Starting with Columbia Global Technology Growth A (CTCAX) is one possibility. CTCAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
CTCAX 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.
History of Fund/Manager
CTCAX is a part of the Columbia family of funds, a company 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 $1.09 billion in assets, as of the most recently available information. The fund is currently managed by Rahul Narang who has been in charge of the fund since July of 2012.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. CTCAX has a 5-year annualized total return of 15.92%, and it sits 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 32.67%, 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. The standard deviation of CTCAX over the past three years is 17.93% compared to the category average of 12.82%. Over the past 5 years, the standard deviation of the fund is 21.42% compared to the category average of 14.36%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.27, the fund 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. Over the past 5 years, the fund has a negative alpha of -1.26. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.