Last updated: Dec-11-2017

    
 
Fidelity Technology Innovators Fund capitalizes on tech boom
12/12/2017 9:25:11 AM
HOME : FEATURES : COLUMNS : Fidelity Technology Innovators Fund capitalizes on tech boom
Show Printable Version Download Plain Text
 
DUE DILIGENCE
Objective research, analysis, and insight on investment funds in Canada from an acknowledged industry expert



By Dave Paterson  | Wednesday, November 22, 2017


 

There is no denying that technology plays a key role in the U.S. economy, both in terms of innovation and invention, as well as the available investment opportunities. Technology is the largest sector in the S&P 500, representing nearly 20% of the market capitalization. The Fidelity Technology Innovators Fund has taken advantage of this trend, with the Series F posting a 5-year average annual compounded rate of return of 29.15%, compared with 8.1% for the S&P/TSX Composite Total Return Index.

Investing in technology is not without its risks, as anyone who lived through the tech bubble can attest. In the 1999-2000 period, investors bid tech names up to unprecedented heights, only to see them come crashing down to earth. In fact, many tech-focused funds have not yet made up those losses, even after their recent strong gains.

The Fidelity Technology Innovators Fund has been one of the more attractive technology funds, particularly in the past three years. Manager HyunHo Sohn took over the management duties in early 2013, and looks for long-term structural winners that are trading at attractive valuations. Still, make no mistake about it, this is a growth fund. It trades at valuation levels that are high compared with the broader market, but are on the lower end, relative to other tech-focused funds.

The portfolio is reasonably diversified, consisting of approximately 65 technology companies. It has a global mandate, and at the end of January, had about 62% invested in the U.S., 10% in Japan, with the rest spread across Asia and Europe.

The fund holds a lot of household names. As of Oct. 31, top holdings included Alphabet Inc. (NASDAQ: GOOGL), Intel Corp. (NASDAQ: INTC), Apple Corp. (NASDAQ: AAPL), SAP SE (FRA: SAP), Taiwan Semiconductor Manufacturing Co Ltd. (TPE: 2330). About a 26% of the fund is invested in software, 21% in chipmakers, 21% in Internet software, with the balance in hardware and equipment makers.

For the three years ending Oct. 31, the fund delivered an average annual compounded rate of return of 26.5%, trailing only the TD Science & Technology Fund in the category. However, at a 3-year average standard deviation of 15.9%, volatility has been lower than the 17.2% of the TD offering, resulting in better risk-adjusted returns.

For those looking to add some tech exposure to their funds, this is one to consider.

Fidelity Technology Innovators Fund
Fund company:
Fidelity Investments Canada
Fund type:
Sector Equity 
Style: All Cap Growth
Risk level: Medium High
Load status: Optional
RRSP/RRIF suitability: Good
Manager: HyunHo Sohn since March 2013
MER: 2.38% (front end units)
Fund code: FID297 (front-end load)
Minimum investment: $500

Dave Paterson, CFA, is the Director of Research, Investment Funds for D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due diligence on a variety of investment products. He is also the publisher of Dave Paterson’s Top Funds Report, offering regular commentary and in-depth analysis of Canada’s top investment funds. He uses a unique analytical approach to identify funds with strong, risk-adjusted returns, and regularly publishes his insights and analyses in Fund Library.

Notes and Disclaimer

© 2017 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

Commissions, trailing commissions, management fees and expenses all may be associated with fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently and past performance may not be repeated. No guarantee of performance is made or implied. This article is for information purposes only and is not intended as personalized investment advice.

 
:: STOCK SEARCH
Find a Stock

(Leave blank for all)
Symbol   Name
:: MEMBER SERVICES
Username:
Password:
Forgot your password?
Register now
Tech Support
:: USEFUL LINKS
For general inquiries, please email the Librarian.
 
Home |  Features |  Member Services |  Tools |  Funds |  About Us
For any questions or problems with this site, please contact the Librarian.
Page ID: 20:40:1070:00016447:9/19/2016:11:02:29 AM Duration of this visit: 0 sec.