Is Columbia Global Technology Growth Z (CMTFX) a Strong Mutual Fund Pick Right Now?

Sector - Tech fund seekers should consider taking a look at Columbia Global Technology Growth Z CMTFX. CMTFX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

CMTFX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.

History of Fund/Manager

Columbia is based in Boston, MA, and is the manager of CMTFX. The Columbia Global Technology Growth Z made its debut in November of 2000 and CMTFX has managed to accumulate roughly $631.62 million in assets, as of the most recently available information. Rahul Narang is the fund's current manager and has held that role since July of 2012.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 23.57%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 23.5%, 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. The standard deviation of CMTFX over the past three years is 14.05% compared to the category average of 10.03%. The standard deviation of the fund over the past 5 years is 13.28% compared to the category average of 9.72%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, CMTFX lost 56.83% and outperformed its peer group by 3.52%. These results could imply that the fund is a better choice than its peers during a sliding market environment.

Nevertheless, with a 5-year beta of 1.07, the fund is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a positive alpha of 8.88. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Examining 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.

Currently, this mutual fund is holding 94.9% stock in stocks, with an average market capitalization of $268.60 billion. With turnover at about 28%, this fund is making 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, CMTFX is a no load fund. It has an expense ratio of 1.01% compared to the category average of 1.35%. So, CMTFX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Columbia Global Technology Growth Z has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Columbia Global Technology Growth Z looks like a good potential choice for investors right now.

Want even more information about CMTFX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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