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Taliban Tremors & Virus Woes Call for Buying These 4 Funds
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After raging havoc across the globe for over a year, the COVID-19 virus has resurfaced with its highly-contagious delta variant. For the week ending Aug 14, this new strain has accounted for 40% of hospitalizations in the United States, with Texas and Florida experiencing the worst outbreak in months.
Per a Barron’s report, over the past 14 days (till Aug 14), new cases are averaging 124,000, up 86%, with deaths rising 75% over the same period. Even the vaccination progress is not helping much as this strain also affects children. Washington is among the worst-affected states, recording more than a 600% rise in new cases over the past month.
There has been a surge in global coronavirus cases as well. China is dealing with the most widespread outbreak, since the initial days in 2020 and has been forced to impose fresh lockdowns measures. This has eventually impacted the crude oil rally. Oil price dropped for the third straight day, with West Texas Intermediate declining 1.2% after a 0.9% loss on Aug 14. This new wave threatens reopening efforts in the States and across the globe, as emergency situations are being announced and restrictions are being reimposed. Surge in delta variant cases is also dampening the enthusiasm in the labor market. Consumers were already facing hurdles like rise in prices of commodities, due to inflation, and now sentiments are being clouded by the spread of this strain. On Aug 14, the University of Michigan reported that its Preliminary figure for August’s Consumer Sentiment has declined to 70.2 from 81.2 in June. Though numbers above 50 indicate optimism, the steep decline does raise an alarm.
Additionally, investors have been spooked by Taliban’s move to take over control of Afghanistan on Aug 15, filling up the vacuum created by the departure of the American and NATO forces. The killing of at least five people in Kabul airport was reported by Indian Express, while hundreds tried to forcibly enter planes to flee the Afghan capital. So far, more than 60 countries, including Australia, Canada, France, Germany, Italy, Japan, Republic of Korea, Qatar and the U.K., have jointly issued a statement that Afghans and international citizens who want to leave the country must be allowed safe passage through airports and border crossing.
While the virus continues to wreak havoc, this geopolitical tiff may also impact the economy. Hence, investors can expect volatility in the markets in the coming days.
4 Safe Picks
Given the current scenario, we have shortlisted four funds from the utility, healthcare, and real estate sectors that are considered safe bets. These mutual funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) and the minimum initial investment for these funds is within $5,000.
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 money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Utilities Portfolio (FSUTX - Free Report) aims for capital appreciation. This non-diversified fund invests majority of assets in common stocks of companies primarily engaged in the utilities industry and companies generating most of their revenues from utility operations.
This Zacks Sector – Utilities has a history of positive total returns for more than 10 years. Specifically, FSUTX has returned 8.9% and 9.4% in the past three and five-year period, respectively. 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 0.76%, which is below the category average of 0.94%.
Fidelity Select Health Care Portfolio (FSPHX - Free Report) fund aims for capital appreciation. This non-diversified fund invests majority of assets in common stocks of companies principally engaged in the design, manufacture or sale of products or services used for or in connection with health care or medicine.
This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 17.9% and 16.5% over the past three and five-year period, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSPHX has an annual expense ratio of 0.69% versus the category average of 1.03%.
Fidelity Real Estate Investment Portfolio (FRESX - Free Report) fund aims for above-average income and long-term capital growth, which is consistent with reasonable investment risk. This non-diversified fund invests primarily in common stocks. The majority of FRESX’s assets are invested in securities of companies, principally engaged in the real estate industry and other real estate-related investments.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 11.5% and 6.3% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FRESX has an annual expense ratio of 0.74% versus the category average of 1.08%.
Fidelity Select Medical Technology and Devices Portfolio (FSMEX - Free Report) fund aims for capital growth. It invests majority of assets in companies that are engaged in activities such as research, manufacturing, supply and sale of medical equipment and related technologies.
This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund’s returns over the one and three-year benchmarks are 24.9% and 22.2%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSMEX has an annual expense ratio of 0.70%, which is below the category average of 1.03%.
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Taliban Tremors & Virus Woes Call for Buying These 4 Funds
After raging havoc across the globe for over a year, the COVID-19 virus has resurfaced with its highly-contagious delta variant. For the week ending Aug 14, this new strain has accounted for 40% of hospitalizations in the United States, with Texas and Florida experiencing the worst outbreak in months.
Per a Barron’s report, over the past 14 days (till Aug 14), new cases are averaging 124,000, up 86%, with deaths rising 75% over the same period. Even the vaccination progress is not helping much as this strain also affects children. Washington is among the worst-affected states, recording more than a 600% rise in new cases over the past month.
There has been a surge in global coronavirus cases as well. China is dealing with the most widespread outbreak, since the initial days in 2020 and has been forced to impose fresh lockdowns measures. This has eventually impacted the crude oil rally. Oil price dropped for the third straight day, with West Texas Intermediate declining 1.2% after a 0.9% loss on Aug 14. This new wave threatens reopening efforts in the States and across the globe, as emergency situations are being announced and restrictions are being reimposed. Surge in delta variant cases is also dampening the enthusiasm in the labor market. Consumers were already facing hurdles like rise in prices of commodities, due to inflation, and now sentiments are being clouded by the spread of this strain. On Aug 14, the University of Michigan reported that its Preliminary figure for August’s Consumer Sentiment has declined to 70.2 from 81.2 in June. Though numbers above 50 indicate optimism, the steep decline does raise an alarm.
Additionally, investors have been spooked by Taliban’s move to take over control of Afghanistan on Aug 15, filling up the vacuum created by the departure of the American and NATO forces. The killing of at least five people in Kabul airport was reported by Indian Express, while hundreds tried to forcibly enter planes to flee the Afghan capital. So far, more than 60 countries, including Australia, Canada, France, Germany, Italy, Japan, Republic of Korea, Qatar and the U.K., have jointly issued a statement that Afghans and international citizens who want to leave the country must be allowed safe passage through airports and border crossing.
While the virus continues to wreak havoc, this geopolitical tiff may also impact the economy. Hence, investors can expect volatility in the markets in the coming days.
4 Safe Picks
Given the current scenario, we have shortlisted four funds from the utility, healthcare, and real estate sectors that are considered safe bets. These mutual funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) and the minimum initial investment for these funds is within $5,000.
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 money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Utilities Portfolio (FSUTX - Free Report) aims for capital appreciation. This non-diversified fund invests majority of assets in common stocks of companies primarily engaged in the utilities industry and companies generating most of their revenues from utility operations.
This Zacks Sector – Utilities has a history of positive total returns for more than 10 years. Specifically, FSUTX has returned 8.9% and 9.4% in the past three and five-year period, respectively. 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 0.76%, which is below the category average of 0.94%.
Fidelity Select Health Care Portfolio (FSPHX - Free Report) fund aims for capital appreciation. This non-diversified fund invests majority of assets in common stocks of companies principally engaged in the design, manufacture or sale of products or services used for or in connection with health care or medicine.
This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 17.9% and 16.5% over the past three and five-year period, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSPHX has an annual expense ratio of 0.69% versus the category average of 1.03%.
Fidelity Real Estate Investment Portfolio (FRESX - Free Report) fund aims for above-average income and long-term capital growth, which is consistent with reasonable investment risk. This non-diversified fund invests primarily in common stocks. The majority of FRESX’s assets are invested in securities of companies, principally engaged in the real estate industry and other real estate-related investments.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 11.5% and 6.3% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FRESX has an annual expense ratio of 0.74% versus the category average of 1.08%.
Fidelity Select Medical Technology and Devices Portfolio (FSMEX - Free Report) fund aims for capital growth. It invests majority of assets in companies that are engaged in activities such as research, manufacturing, supply and sale of medical equipment and related technologies.
This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund’s returns over the one and three-year benchmarks are 24.9% and 22.2%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSMEX has an annual expense ratio of 0.70%, which is below the category average of 1.03%.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>