fidelity select technology

Maximizing Tech Investments: A Comprehensive Review of Fidelity Select Technology Portfolio

Navigating the complex realm of tech investing isn’t easy. Yet, Fidelity Select Technology simplifies this journey, providing a gateway to a diverse array of tech companies. With this fund, you’re not just investing; you’re becoming part of the technological revolution.

Stay tuned as we delve deeper into the intricacies of Fidelity Select Technology, exploring its strengths, potential risks, and why it’s become a go-to choice for tech-savvy investors. Get ready to uncover the secrets behind its success and learn how it could fit into your investment strategy.

Fidelity Select Technology

Fidelity Select Technology (FSPTX) forms a part of a high-performing mutual fund managed by Fidelity Investments, renowned for its prowess in harnessing the potential of breakthroughs in the tech sector. This fund mainly invests in equity securities, focusing on those companies that design, develop, manufacture, and deploy pioneering technologies.

fidelity select technology

Of the total assets of FSPTX, approximately 80% pledge toward investments in tech-related securities of both domestic and foreign issuers. These span varied aspects, encompassing hardware, software, or IT services, with an emphasis on data processing, application software, and semiconductors. The fund’s progression stems from capital growth, correlating with the growth aspects, size, and profitability of the potential tech companies in their arsenal.

For instance, FSPTX vested faith in Apple, contributing 14.92% of the total assets, followed by Alphabet, Microsoft, and Visa, contributing 10.35%, 9.41%, and 3.34% respectively, as of 30th September 2021. These selections were the outcome of meticulous research, trend predictions, and financial strength assessments carried out by Fidelity’s resourceful investment division.

fidelity select technology

Pertaining to risk, the fund exhibits a high-reward/high-risk trait, noting high volatility in the technology sector. A measure of risk lies in the potential price fluctuation of the set of stocks in the fund’s portfolio. However, its historical performance, benchmarked by the MSCI ACWI Information Technology Index, reverberates its robustness, showing strong gains over the years, in sync with the uptrend in the tech industry.

Regarding expenses, FSPTX exhibits an expense ratio of 0.72%, below the average of technology mutual funds. The fund demands a minimum initial investment of $2,500 excluding investors from certain retirement plans, indicating its preference for serious investors.

In essence, Fidelity Select Technology wields the capacity to ride the waves of tech innovations. It stands as a feasible option for investors banking on the powerful, dynamic tech-driven growth, while acknowledging the tug of potential risks involved. 

Features of Fidelity Select Technology

Fidelity Select Technology (FSPTX) boasts numerous essential elements, enriching its portfolio’s overall robustness and making it attractive to investors willing to tackle a higher risk profile. The fund’s core aspects group into three categories: diversity of holdings, responsive management strategy, and potential for strong returns.

fidelity select technology

Diversity in holdings of FSPTX comes from its expansive investment in the lucrative tech sector. For instance, more than 80% of its assets align with technology securities. This broad reach includes powerhouses such as Alphabet Inc. and Apple, allowing investors to enjoy growth proportionate to the tech industry’s ever-changing landscape.

Lastly, FSPTX entertains potential for superior returns, despite its inherent volatility. A performance review reveals consistent outperformance against the MSCI ACWI Information Technology Index. This potential for strong returns, paired with an expense ratio beneath the industry average and a $2,500 entry-level investment, solidifies FSPTX’s appeal for those aiming for significant long-term wealth bootstrapping in the vibrant technology milieu.

Observing its features, it’s clear that FSPTX serves as an enticing choice for investors seeking to capitalize on the buoyant dynamics of the technology sector.

Benefits of Investing in Fidelity Select Technology

Following the trend of the tech market’s success, FSPTX stimulates its value with a variety of tech company holdings. This diversity signifies lesser dependency on a single company’s fortune, minimizing risk exposure during market downturns. For instance, its largest holding, Apple, accounted for 19.9% of the fund’s total assets as of November 2021, demonstrating a strong but non-threatening stake in a single entity.

fidelity select technology

High returns outrun the expense, with the fiscal year 2021 revealing a remarkable 58.33% return rate. The one, three, five, and ten-year return rates, on average, also tally higher than its category. Remarkably, over a five-year span, the annual return rate came to 31.83% in 2020, courtesy of the tech stock boom during the COVID-19 pandemic.

FSPTX’s nimble management led by Charlie Chai influences its expert investment choices. His adept understanding of the trajectory of tech innovations drives priority for promising companies. Hence, FSPTX stays ahead of trends, optimizing returns. For instance, he led aggressive investing in Visa and Paypal before they underscored the immense potential of digital payments and e-commerce.

Encouraging transparency, Fidelity clearly discloses FSPTX’s expense ratio (0.71%), holdings, and annual report details. Such transparency assures investors of fair play, bringing confidence while investing.