Is Putnam Global Technology Y (PGTYX) a Strong Mutual Fund Pick Right Now?
Sector - Tech fund seekers should consider taking a look at Putnam Global Technology Y (PGTYX). PGTYX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that PGTYX 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.
History of Fund/Manager
Putnam Funds is based in Canton, MA, and is the manager of PGTYX. Putnam Global Technology Y made its debut in January of 2009, and since then, PGTYX has accumulated about $139.49 million in assets, per the most up-to-date date available. The fund's current manager, Di Yao, has been in charge of the fund since December of 2012.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 18.08%, and it sits 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 20.46%, 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, PGTYX's standard deviation comes in at 16.31%, compared to the category average of 10.87%. The standard deviation of the fund over the past 5 years is 16.14% compared to the category average of 10.98%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.13, which means it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a positive alpha of 5.81. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
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, PGTYX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 1.39%. PGTYX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Putnam Global Technology Y ( PGTYX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Tech, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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