If you have been looking for Mutual Fund Equity Report funds, it would not be wise to start your search with Firsthand Technology Opportunities (TEFQX). TEFQX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Firsthand is based in San Jose, CA, and is the manager of TEFQX. Since Firsthand Technology Opportunities made its debut in September of 1999, TEFQX has garnered more than $116.30 million in assets. Kevin M. Landis is the fund’s current manager and has held that role since September of 1999.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of -2.51%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of -13.07%, which places it in the bottom 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. The standard deviation of TEFQX over the past three years is 36.29% compared to the category average of 27.15%. Looking at the past 5 years, the fund’s standard deviation is 31.61% compared to the category average of 24.5%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.18, which means it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -9.62, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 77.77% of its assets in stocks, with an average market capitalization of $16.52 billion. The fund has the heaviest exposure to the following market sectors:
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Technology
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Non-Durable
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Other
Turnover is 14%, which means this fund makes fewer trades than comparable funds.
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, TEFQX is a no load fund. It has an expense ratio of 1.85% compared to the category average of 1.30%. Looking at the fund from a cost perspective, TEFQX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Firsthand Technology Opportunities ( TEFQX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, Firsthand Technology Opportunities ( TEFQX ) looks like a somewhat weak choice for investors right now.
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