We will compare FBSOX vs FSCSX:
Both FBSOX and FSCSX are mutual funds. A mutual fund invests in a mix of different securities to offer investors a diversified portfolio.
Since FBSOX and FSCSX fall under the same category of investments, they most likely share many similarities.
How can you pick the one that suits your investment goals?
The best approach to choosing the right fund in such a case may involve thorough research. You'll have to consider essential factors like fund performance, cost, size, and holdings.
This FBSOX vs FSCSX looks into these factors in detail to help you decide which fund is suitable for your portfolio.
FBSOX vs FSCSX: Comparison
The primary difference between FBSOX and FSCSX is their performance. FSCSX has beaten FBSOX by 3.1% annually over the last 10 years.
FSCSX also has a lower expense ratio of 0.70%, while FBSOX has an expense ratio of 0.72%.
Both expense ratios are considered high compared to similar passively managed funds.
Both FBSOX and FSCSX are actively managed funds.
Lastly, FSCSX has more net assets compared to FBSOX. This increase in net assets gives FSCSX more liquidity.
Both funds are focused on technology stocks and have no minimum initial investment.
FBSOX vs FSCSX: Costs (Fee Comparison)
When you talk about fees and expenses in a mutual fund, they comprise charges that investors may incur. These charges include investment advisory fees, shareholder transaction costs, and marketing and distribution expenses.
The funds' management passes these costs to investors using different ways, including expense ratio.
For FBSOX and FSCSX, the fee is similar.
FBSOX has an expense ratio of 0.72%, while FSCSX has an expense ratio of 0.70%.
However, FSCSX's expense ratio is slightly lower than FBSOX's.
It's important to note that fees can significantly affect portfolio growth.
Here is what a 0.68% fee (difference between a similar fund like VUG and FBSOX) will cost over 30 years.
Assuming you start with an initial investment of $100,000 and contribute $10,000 yearly over 30 years. You will have $450,000 less in your account.
This does not include costs to buy and sell your shares.
For these two funds, $10,000 in FBSOX equals an annual expense fee of $7.20 and $7.10 for FSCSX.
Winner: FSCSX (although there are much better options in terms of cost).
FBSOX vs FSCSX: Fund Holdings Comparison
Sector Weightings (%)
The sector weightings for FBSOX and FSCSX differ specifically in the technology sector. FSCSX has 76% of its assets in the technology sector, while FBSOX holds 48% of technology.
This difference explains the discrepancy in performance between the two funds.
Growth and technology stocks have outperformed over the last decade. However, this does not guarantee the next 10 years will be the same.
FSCSX Top 10 Holdings
FBSOX Top 10 Holdings
Both FBSOX and FSCSX are Sector Equity Technology funds. This may mean they are both investing in almost the same investments behind the scenes.
FSCSX holds 59 different securities and approximately $3 billion total assets investment. The fund has 88% of its holdings in the biotech sector and 11% in pharmaceuticals.
Fidelity's FBSOX has assets totaling almost $13 billion invested in 78 different holdings. It holds 88% in the biotech sector, with 11% in pharmaceuticals.
FBSOX vs FSCSX: Performance
FBSOX and FSCSX have had different performance returns over the last 10 years, with FSCSX beating FBSOX by 3.1% annually. That is a significant difference, especially considering compound interest on those returns.
Here is how FBSOX and FSCSX performance compares:
Total Return Ranking – Trailing
Return Ranking – Calendar
Performance is one of the foremost things to look out for in choosing where to invest. It gives you a hint on whether or not they are in for a loss or a profit or how much returns they can expect, a risk measure.
FBSOX and FSCSX have performed much better than the benchmark index (S&P 500 TR USD). Except for the 3-year return of FBSOX, which was lower than the 3-year return of the S&P 500.
This means that both funds are good choices regarding performance.
However, FSCSX has shown a better performance than FBSOX and may give you a higher return on investment.
Winner: FSCSX
FBSOX vs FSCSX: Fund Size Comparison
Both FBSOX and FSCSX have a similar number of assets under management. FBSOX has $2.87 billion in assets under management, while FSCSX has $11.3 billion.
Fund size helps investors determine a fund's liquidity- the more liquidity, the better for investors.
In this case, FSCSX has more liquidity compared to FBSOX but not by a significant amount.
Winner: FSCSX
FBSOX vs FSCSX: Dividends
Dividends refer to profit distribution to shareholders. The dividend yield for both FBSOX and FSCSX is 0.00%.
FBSOX Description
Name: Fidelity Select IT Services Portfolio
Category: Technology
Fund Family: Fidelity Investments
Inception Date: 1998
Expense Ratio: 0.72%
Net Assets: $3.61 Billion
Fidelity Select IT Services Portfolio (FBSOX) seeks capital appreciation. The fund invests primarily in common stocks.
It typically invests at least 80% of assets in securities of companies principally engaged in providing information technology services.
The fund invests in domestic and foreign issuers.
It uses fundamental analysis of factors such as each issuer's financial condition, industry position, and market and economic conditions to select investments.
The fund is non-diversified.
FBSOX Performance
Fidelity's FBSOX has significantly outperformed the S&P 500 for the past 10 years.
FBSOX Top 10 Holdings
FBSOX is primarily made up of Mastercard, Visa, Accenture, Paypal, and Cognizant.
FSCSX Description
Name: Fidelity Select Software & IT Services Portfolio
Category: Technology
Fund Family: Fidelity Investments
Inception Date: 1985
Expense Ratio: 0.70%
Net Assets: $13.22 Billion
Fidelity Select Software and IT Services Portfolio (FSCSX) seeks capital appreciation. The fund invests primarily in common stocks.
It typically invests at least 80% of assets in securities of companies principally engaged in research, design, production, or distribution of products or processes related to software or information-based services.
The fund invests in domestic and foreign issuers.
It uses fundamental analysis of factors such as each issuer's financial condition, industry position, and market and economic conditions to select investments.
The fund is non-diversified.
FSCSX Performance
FSCSX has significantly outperformed the S&P 500 for the past 10 years.
If you invested $10,000 10 years ago in FSCSX, you'd have roughly $65,000 by now. But an investment of $10,000 in the S&P 500 10 years ago will give you about $35,000.
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FBSOX vs FSCSX Which Mutual Fund Is Better?
FBSOX and FSCSX belong to the same investment category; they are Mutual Funds from the Fidelity family.
Fidelity is a notable investment company and one of the oldest providers of mutual funds, among other investment products.
FBSOX and FSCSX are Fidelity mutual funds.
These mutual funds are ideal for new investors since there is no minimum investment. Instead, you can practically invest every cent and start earning performance returns.
In other words, both FBSOX and FSCSX have no minimum investments.
The biggest downside to FBSOX and FSCSX is their expense ratio.
An expense ratio of 0.72% and 0.70 is exceptionally high compared to other passively managed index funds.
Here are similar funds with much lower expense ratios:
Fidelity Select Funds
Interestingly, FBSOX and FSCSX are among Fidelity's select funds.
Over the past 20 years, the average Fidelity Select fund has outperformed the S&P 500 by 4.7% each year.
That is to say, investing in either of the two Fidelity funds can provide great returns. The question is if those returns outweigh the high expense ratio.
In my opinion, they do not.
Performance returns are not guaranteed, but fees are.
Nevertheless, Fidelity Select Funds have become popular among investors for their concentrated portfolio and focus on narrow sectors in the market.
Fidelity Select Software and IT Services (FSCSX) is one of these funds. However, it offers only a degree of diversification and holds fewer stocks than most other funds.
Which Mutual Fund Is Better?
The best fund for any investor meets their investment goals (as almost every investment expert will advise).
However, FSCSX tends to have an edge over FBSOX.
FSCSX is the winner in terms of cost, performance, and diversification.
Performance and better diversification may improve your chances of getting good returns, whereas lower cost means you're spending less on fees.
Therefore, in the FBSOX vs FSCSX debate, FSCSX is a better option.