3 Funds to Ride Highest Consumer Confidence Since 1990s – September 27, 2018

Per the latest data from the Conference Board, the measure of confidence that U.S. citizens show in the domestic economy, surged in September to its highest level in the last 18 years. Much of this can be attributed to a robust labor market and upbeat economic conditions. Notably, GDP logged its best growth since 2014.

Higher consumer confidence encourages spending in luxury as well as leisure goods, including swank apartments, new appliances and cars. In such an encouraging condition, it makes buying mutual funds that invest in leisure, discretionary and transportation companies prudent.

Consumer Confidence Continues to Rise

On Sep 25, the Conference Board reported a surge in consumer confidence among Americans for the month of September. The index rose to 138.4 in September, marking an uptick from 133.4 in the previous month. The index scaled its highest level since September 2000, when it had hit an all-time high of 144.7.

Additionally, an average American’s confidence in the present situations improved from 172.8 last month to 173.1 this month, the highest level since 2000. The future expectations index also increased from 109.3 to 115.3.

Factors Supporting Growth

Surge in consumers’ confidence was supported by robust job growth and strength in the overall economy. According to the Department of Commerce’s second estimate, GDP increased 4.2% in the second quarter, reflecting an upward revision from 4.1% initially estimated. This is the sharpest pace of growth experienced since 4.9% increase registered in the third quarter of 2014. Such developments also indicate that the economy is on track to achieve an annual growth of 3%, which President Trump had targeted. Additionally, in the first half of 2018, the economy expanded at a seasonally adjusted rate of 3.2%.

The current unemployment rate is lingering near a 20-year low, while the economy added jobs for 95 successive months in August, marking its longest streak in history. Moreover, the economy has produced an average of 207,000 new jobs per month so far this year. This is faster than the hiring spree in both 2016 and 2017.

3 Best Funds to Buy Now

Given such circumstances, we have highlighted four mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to gain. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Fidelity Select Utilities Portfolio (FSUTX Free Report) invests the lion’s share of its assets in common stocks of companies primarily involved in the utility sector, and companies that derive the major portion of its revenues from operations related to this sector.

This Sector – Utilities product has a history of positive total returns for over 10 years. Specifically, the fund has returned 14.1% over the three-year and 11.9% over the five-year benchmarks. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

FSUTX has an annual expense ratio of 0.77%, which is below the category average of 1.09%.

Fidelity Select Leisure Fund (FDLSX Free Report) seeks capital appreciation. FDLSX normally invests at least 80% of its assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries. The fund offers dividends and capital gains twice a year in April and December.

This Sector – Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 11.2% over the three-year and 12.8% over the five-year benchmarks. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

FDLSX has an annual expense ratio of 0.77%, which is below the category average of 1.17%.

Fidelity Select Consumer Discretionary Portfolio Fund (FSCPX Free Report) invests in large-blend companies. The objective of FSCPX is to seek capital appreciation. FSCPX normally invests at least 80% of its assets in common stocks of companies principally engaged in the manufacture and distribution of goods and services to both domestic and international consumers.

This Sector – Other product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and five-year benchmarks are 15.5% and 14.9%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

FSCPX has an annual expense ratio of 0.77%, which is below the category average of 1.17%.

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