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On Oct 15, the U.S. Census Bureau reported that retail and food services sales rose 0.7% in September, outpacing the consensus estimate of a 0.1% decline. August’s retail sales figure was also upwardly revised to 0.9%. For the month, spending accelerated as coronavirus cases declined and students and employees returned to schools and offices. This, in turn, boosted sales across sporting goods, music and book stores, highlighting a 3.7% jump from August.
Sales across general merchandise and miscellaneous retailers also rose 2% and 1.8%, respectively, while online sales rose 0.6%. However, the fear of coronavirus’ Delta variant spread capped gains across restaurants and bars to 0.3% for the month, while overall food and beverage spending increased 0.7%. Consumers reduced spending on dining out, renting hotel rooms or getting on plane due to the spreading of the Delta variant. But as cases are declining, demand for discretionary products and services will continue to rise.
Retail sales, excluding auto and related product sales, rose 0.8%, higher than the forecasted 0.5%. August’s retail sales, excluding auto, were revised upward to a 2% increase. Auto sales increased 0.5% despite supply-side constraints caused by a shortage in semiconductors, resulting in major production delays. Spending across fuel stations also jumped 1.8% last month.
Consumers had to pay extra as the country recorded the highest inflation in three decades. However, Americans have sufficient money to spend as they saved during the pandemic, and government stimulus keeps the economy afloat. Moreover, the labor market is tight and wages have been rising sharply in the past months.
3 Top Fund Picks
Given the rebound in retail sales in September, we are optimistic that the trend will continue for the last quarter of the year. Hence, we have shortlisted three mutual funds that are poised to grow. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging one and three-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 fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and portfolio diversification without several commission charges 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 Retailing Portfolio (FSRPX - Free Report) fund aims for capital appreciation. This non-diversified fund invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.
This Zacks Sector-Other product has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned 18.4% and 21.6% 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.
FSRPX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73%, which is below the category average of 0.79%.
Fidelity Select Leisure Portfolio (FDLSX - Free Report) fund aims for capital appreciation. This non-diversified fund invests a majority of assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries.
This Zacks Sector-Other product has a history of positive total returns for more than 10 years. Specifically, FDLSX has three and five-year return of 16.6% and 17.1%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.77%, below the category average of 0.79%.
Fidelity Select Consumer Staples Portfolio (FDFAX - Free Report) fund aims for capital growth. It invests a majority of assets in securities of companies primarily engaged in manufacturing, marketing or distribution of consumer staples products. The non-diversified fund invests in both U.S. and non-U.S. issuers.
This Zacks sector – Other product has a history of positive total returns for more than 10 years. Specifically, FDFAX has returned 11.1% and 7.1% 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.
FDFAX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.75% versus the category average of 0.76%.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.
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Retail Sales Swell in September: 3 Fund Picks
On Oct 15, the U.S. Census Bureau reported that retail and food services sales rose 0.7% in September, outpacing the consensus estimate of a 0.1% decline. August’s retail sales figure was also upwardly revised to 0.9%. For the month, spending accelerated as coronavirus cases declined and students and employees returned to schools and offices. This, in turn, boosted sales across sporting goods, music and book stores, highlighting a 3.7% jump from August.
Sales across general merchandise and miscellaneous retailers also rose 2% and 1.8%, respectively, while online sales rose 0.6%. However, the fear of coronavirus’ Delta variant spread capped gains across restaurants and bars to 0.3% for the month, while overall food and beverage spending increased 0.7%. Consumers reduced spending on dining out, renting hotel rooms or getting on plane due to the spreading of the Delta variant. But as cases are declining, demand for discretionary products and services will continue to rise.
Retail sales, excluding auto and related product sales, rose 0.8%, higher than the forecasted 0.5%. August’s retail sales, excluding auto, were revised upward to a 2% increase. Auto sales increased 0.5% despite supply-side constraints caused by a shortage in semiconductors, resulting in major production delays. Spending across fuel stations also jumped 1.8% last month.
Consumers had to pay extra as the country recorded the highest inflation in three decades. However, Americans have sufficient money to spend as they saved during the pandemic, and government stimulus keeps the economy afloat. Moreover, the labor market is tight and wages have been rising sharply in the past months.
3 Top Fund Picks
Given the rebound in retail sales in September, we are optimistic that the trend will continue for the last quarter of the year. Hence, we have shortlisted three mutual funds that are poised to grow. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging one and three-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 fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and portfolio diversification without several commission charges 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 Retailing Portfolio (FSRPX - Free Report) fund aims for capital appreciation. This non-diversified fund invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.
This Zacks Sector-Other product has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned 18.4% and 21.6% 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.
FSRPX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73%, which is below the category average of 0.79%.
Fidelity Select Leisure Portfolio (FDLSX - Free Report) fund aims for capital appreciation. This non-diversified fund invests a majority of assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries.
This Zacks Sector-Other product has a history of positive total returns for more than 10 years. Specifically, FDLSX has three and five-year return of 16.6% and 17.1%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.77%, below the category average of 0.79%.
Fidelity Select Consumer Staples Portfolio (FDFAX - Free Report) fund aims for capital growth. It invests a majority of assets in securities of companies primarily engaged in manufacturing, marketing or distribution of consumer staples products. The non-diversified fund invests in both U.S. and non-U.S. issuers.
This Zacks sector – Other product has a history of positive total returns for more than 10 years. Specifically, FDFAX has returned 11.1% and 7.1% 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.
FDFAX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.75% versus the category average of 0.76%.
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.
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