If you've been stuck searching for Sector - Tech funds, you might want to consider passing on by BNY Mellon Tech Growth A (DTGRX) as a possibility. DTGRX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
We note that DTGRX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
DTGRX finds itself in the BNY Mellon family, based out of New York, NY. Since BNY Mellon Tech Growth A made its debut in October of 1997, DTGRX has garnered more than $315.34 million in assets. The fund is currently managed by Robert Zeuthen who has been in charge of the fund since March of 2022.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 15.61%, and is in the middle 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 5.72%, which places it in the bottom 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. DTGRX's standard deviation over the past three years is 27.73% compared to the category average of 17.61%. The fund's standard deviation over the past 5 years is 26.6% compared to the category average of 18.45%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.36, so it is likely going to be 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. With a negative alpha of -5.98, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 principally on equities that are traded in the United States.
This fund is currently holding about 83.27% in stocks, with an average market capitalization of $446.73 billion. With turnover at about 21.29%, this fund makes fewer trades than its comparable peers.
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, DTGRX is a load fund. It has an expense ratio of 1.13% compared to the category average of 1.05%. So, DTGRX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Overall, BNY Mellon Tech Growth A ( DTGRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and higher fees, BNY Mellon Tech Growth A ( DTGRX ) looks like a somewhat weak choice for investors right now.
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This article originally published on Zacks Investment Research (zacks.com).
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