3 Winning Fidelity Mutual Funds From 1H20 – July 9, 2020

Fidelity Investments, one of the largest and oldest mutual fund companies in the world, carries out operation in the United States through 10 regional offices and over 197 Investor Centers. It also has its presence in eight more countries of North America, Europe, Asia and Australia.

The company seeks to provide investment advice, discount brokerage services, retirement services, wealth management services, securities execution and clearance and life insurance products to its clients.

Investors vest their faith in Fidelity’s funds because they are known for their active management coupled with tactical investments. Obviously, not all the actively managed funds from the family always outperform their benchmark. However, a majority of funds from the category do beat the broader markets, providing stiff competition to index funds as well as ETFs.

At Fidelity, a large group of investment professionals carry out extensive and in-depth research to open up potential investment avenues worldwide for their investors. To top it all, low expenses, effective fund management and the ability to survive market volatility have resulted in strong fund performance.

How has Fidelity Performed in the First Half of 2020?

By the end of the first half of 2020, Fidelity Investments had more than $7.3 trillion of assets under management. It also had around $2.9 trillion of mutual fund assets. The initial investment of the majority of Fidelity mutual funds ranges from $0 to $2,500. As of Jun 30, 2020, out of the total number of funds under Fidelity, only 3.2% were load funds, while the remaining 96.8% were no-load funds.

Further, Fidelity Advisor Growth Opportunities Fund Class M (FAGOX Free Report) turned out to be one of the best-performing mutual funds from this family. The fund has posted solid gains in the year-to-date period. FAGOX, which invests a bulk of its assets in common stocks of companies with above-average growth potential, has returned 11.2% in the year-to-date period.

Factors Supporting Gains

Fidelity invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments were made in technology. Among the cyclical sectors, the fund family invested the maximum in the financial services sector, while among the defensive sectors, it invested heavily in healthcare.

Technology Select Sector SPDR (XLK) has gained 17.5% in the year to date period and has consistently remained the best-performing among the 11 S&P 500 sectors.

3 Best Funds to Buy Now

Given the circumstances, we have highlighted three Fidelity mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to gain from the above-mentioned factors. Moreover, these funds have encouraging year to date (YTD) and one-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform 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 their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Fidelity Select Health Care Services Portfolio (FSHCX Free Report) fund seeks long-term growth of capital and invests the bulk of its shares in securities of companies involved in ownership and management of hospitals, nursing homes and health maintenance organizations. FSHCX also invests in companies that provide direct healthcare services. This non-diversified fund invests in common stocks of both U.S. and non-U.S. companies.

This Zacks sector – Health product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSHCX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.75%, which is below the category average of 1.24%. The fund has YTD and one-year returns of 3.7% and 29.3%, respectively.

Fidelity Select Wireless Portfolio (FWRLX Free Report) fund aims for capital appreciation. It invests the majority of its assets in securities of companies that are engaged in activities relating to wireless communications services or products.

This Sector-Tech product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the YTD and one -year benchmarks are 3% and 29.8%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

The fund has an annual expense ratio of 0.81%, below the category average of 1.23%.

Fidelity Select Software & IT Services Portfolio (FSCSX Free Report)  invests the majority of its assets in companies whose primary operations are related to software or information-based services. It primarily focuses on acquiring common stocks of both domestic and foreign companies.

This Zacks Sector-Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSCSX has an annual expense ratio of 0.77%, which is below the category average of 1.43%. The fund has YTD and one-year returns of 12.6% and 31%, respectively.

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