Sector – Real Estate fund seekers should not consider taking a look at Fidelity International Real Estate (FIREX) at this time. FIREX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

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We classify FIREX in the Sector – Real Estate category, an area full of possible choices. Sector – Real Estate mutual funds typically invest in various real estate investment trusts (REIT). A REIT is a popular income vehicle thanks to taxation rules that require REITs to payout at least 90% of their income each year in order to avoid double taxation. This technique makes securities here high dividend payers, and almost bond like in some cases; however, they still carry the risk of equities.

FIREX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity International Real Estate debuted in December of 2004. Since then, FIREX has accumulated assets of about $150.51 million, according to the most recently available information. Guillermo de las Casas is the fund’s current manager and has held that role since April of 2010.

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of -2.22%, and it sits in the bottom 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 -8.96%, 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.

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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. Compared to the category average of 15.14%, the standard deviation of FIREX over the past three years is 17.97%. The fund’s standard deviation over the past 5 years is 17.79% compared to the category average of 16.05%. 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 0.8, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -13.33, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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