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Sector - Tech fund seekers should consider taking a look at Putnam Global Technology A (PGTAX). PGTAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Sector - Tech funds is an area filled with options, and PGTAX 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
Putnam Funds is based in Canton, MA, and is the manager of PGTAX. The Putnam Global Technology A made its debut in January of 2009 and PGTAX has managed to accumulate roughly $201.89 million in assets, as of the most recently available information. The fund is currently managed by Di Yao who has been in charge of the fund since December of 2012.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 17.82%, and is 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 22.53%, which places it in the top third during this time-frame.
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. Over the past three years, PGTAX's standard deviation comes in at 16.24%, compared to the category average of 10.54%. Over the past 5 years, the standard deviation of the fund is 16.14% compared to the category average of 10.67%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PGTAX has a 5-year beta of 1.14, which means it 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. PGTAX's 5-year performance has produced a positive alpha of 6.26, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.