Invesco’s QQQ isn’t the only index fund that provides investors with exposure to the technology sector. There are two other popular technology mutual funds that you should know about.
In this comparison, we’ll be looking at FSCSX (Fidelity Select Software and IT Services Portfolio) and FSPTX (Fidelity Select Technology Portfolio).
Let’s see if they can produce above-average returns like some popular tech funds have been doing.
FSCSX vs FSPTX: What Are the Differences
- System Software and Application Software made up over 50% of FSCSX. Meanwhile, with FSPTX, you get a mix of System Software (24%), Technolgy Hardware (20%), and Semiconductors (13.65%).
- The Fidelity Select Software and IT Services Portfolio is more concentrated than its peer. The fund put more emphasis on software-based companies than FSPTX.
- The total portfolio of FSCSX is half of FSPTX’s total holdings (80 and 159, respectively).
- The turnover rate of FSPTX is 76%, which is worrisome. This figure suggests that the fund is not practicing the buy-and-hold strategy. Instead, the fund manager is constantly buying and selling stocks in their portfolio.
FSCSX vs FSPTX: How Are They Similar?
- Both Fidelity mutual funds are obviously tech-centric. One may be more diversified than others in their sub-industries, but overall, they are the same.
- FSCSX and FSPTX distribute dividends to shareholders semi-annually. Investors can expect to receive their payments every April and December.
- When it comes to expense ratio, they are not the cheapest around. FSPTX has an expense ratio of 0.69% and FSCSX’s expense ratio is 0.70%. You are looking at a yearly fee of $70 for every $10,000 invested in either fund.
FSCSX vs FSPTX: Portfolio Composition
Their top holdings are identical, and they’re dominated by large technology companies like Apple, Adobe, Visa, and Salesforce.
FSCSX Top 10 Holdings
| COMPANY | SYMBOL | TOTAL NET ASSETS |
|---|---|---|
| Microsoft Corp. | MSFT | 25.18% |
| Adobe Inc. | ADBE | 6.07% |
| Visa Inc. Cl A | V | 5.88% |
| Salesforce Inc. | CRM | 5.57% |
| Mastercard Inc. | MA | 5.38% |
| PayPal Holdings Inc. | PYPL | 3.86% |
| Alphabet Inc. Cl A | GOOGL | 2.85% |
| Autodesk Inc. | ADSK | 2.39% |
| Cognizant Technology Solutions Corp. | CTSH | 2.33% |
| Accenture PLC Cl A | ACN | 2.06% |
FSPTX Top 10 Holdings
| COMPANY | SYMBOL | TOTAL NET ASSETS |
|---|---|---|
| Microsoft Corp. | MSFT | 22.29% |
| Apple Inc. | AAPL | 19.83% |
| NVIDIA Corp. | NVDA | 5.58% |
| Salesforce Inc. | CRM | 2.99% |
| Mastercard Inc. | MA | 2.69% |
| Visa Inc. Cl A | V | 2.66% |
| Jabil Inc. | JBL | 2.42% |
| Adobe Inc. | ADBE | 2.08% |
| ON Semiconductor Corp. | ON | 1.91% |
| Flex Ltd. | FLEX | 1.85% |
As of 12/31/2021
FSCSX vs FSPTX: Annual Return
| Funds | Fidelity® Select Software & IT Services Portfolio | Fidelity® Select Technology Portfolio |
|---|---|---|
| 1 month | -6.30% | -9.86% |
| 3 months | -9.24% | -8.62% |
| 6 months | -4.77% | -2.83% |
| 1 year | +13.05% | +9.37% |
| 3 years | +27.52% | +36.33% |
| 5 years | +24.90% | +28.24% |
Which is Better, FSCSX or FSPTX?
FSCSX and FSPTX should be on your radar if you’re getting into the technology sector.
Both of these Fidelity mutual funds invest in companies that are leaders in the software services and cloud-based solutions industry. They will continue to grow at an impressive pace.
If I had to pick one, I would go with the Fidelity Select Software and IT Services Portfolio (FSCSX). This fund invests in a sector in which I have a lot of knowledge, and I’m comfortable with its robust portfolio of software stocks.
Community Comments:
Micheal M:
Doing a little comparison this morning with the ‘Fidelity Compare Funds’ screener, I noticed that FSCSX outperforms many other Fidelity funds with a below-average expense ratio. That is impressive!
Nathan B:
What do you guys think of the long term sustainability of FSCSX? Since its inception in 1985, the fund averaged a 16.05% annual return. In the past 10 years, they’ve had a 22.48% average annual return. What are your thoughts?
Kevin C:
I just recently added FSCSX to my portfolio and agree that past performance is impressive. During the past few months, it seems to have lagged others like FOCPX. I just checked, and its one-month and three-month returns are 3.82% and 19.37% compared to 7.8% and 22.34% for FOCPX. Hopefully, it can return to its former ways, but I usually buy and hold. If it sees double digit returns or better per year, I’m pleased.
Gerry S:
I have it, but it is a sector fund, not a diversified holding. It will be more volatile than a diversified S&P 500 fund.
Dave O:
FSPTX is a fantastic fund with a history of great returns. The downside is that they are sector-specific, so if there is a tech crash, you will feel it.
Ernest T:
FSPTX is my favorite. It’s hard to find a Fidelity sector fund beating that one.
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