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Buy These 3 Funds as Retail Sales Continue to Soar
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The retail space is fast getting back on its feet after having slowed down in the latter half of the year. After recording a solid jump in January, retail sales grew once again in February, indicating that the economy is on track for a steady recovery.
According to the latest Mastercard SpendingPulse report, the jump in February’s retail sales came despite rising commodity prices. This shows that people are not hesitant to spend despite rising prices. Moreover, sales have been growing across all categories, driven by e-commerce. Thus, funds like Fidelity Select Retailing Portfolio (FSRPX - Free Report) , Fidelity Select Construction & Housing Portfolio (FSHOX - Free Report) andFidelity Select Consumer Staples Portfolio (FDFAX - Free Report) are likely to benefit in the near term.
Retail Sales Surge
According to the latest Mastercard SpendingPulse report, retail sales grew 8.7% year over year in February and were up 17.3% from the pre-pandemic levels in 2019. In-store sales rose 10% year over year in February.
Sales rose almost across all sections. With more people finally starting to go to office, return-to-office attire sales surged 37.6% year over. This was mainly because most of the people were working form home during this time last year. Also, sales at departmental stores rose 26.3% year over year.
E-commerce, which played a critical role in driving retail sales during the peak of the pandemic, has now become a preferred choice for most. This saw e-online retail sales increasing 4.4% year over year in February and 85.9% from the pre-pandemic levels.
The spending habit of people had changed as a result of the pandemic, which saw them purchasing more commodities than services. However, once the economy began to recover, consumers began to spend on services, reversing the tendency. Restaurant sales increased by 39.4% year over year and 24.2% compared to pre-pandemic levels.
February’s jump in retail sales comes after solid numbers were reported in January. The rise in sales comes despite higher prices and the supply-chain crisis. This also proves that people are ready to spend now and in the coming months too. Additionally, home savings reached a new high in 2021, indicating that consumer spending will increase in the coming months.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to the retail sector that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above factors. 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 Retailing Portfolio fund aims for capital appreciation. FSRPX invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.
Fidelity Select Retailing Portfolio has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 20.9% and nearly 20% over the past three and five-year periods, 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 Construction & Housing Portfolio fund seeks capital growth. FSHOX invests in common stocks and most of its assets in the designing and construction of residential, commercial and industrial facilities etc. As of 1/31/2022, Fidelity Select Construction & Housing Portfolio has an investment of 43.2% of its assets in the retail sector. FSHOX has an investment of 18% of its assets in Home Depot, Inc. (HD) and 17% in Lowe’s Companies, Inc. (LOW), as of 11/30/2021.
Fidelity Select Construction & Housing Portfolio has a history of positive total returns for more than 10 years. Specifically, FSHOX has returned nearly 31.7% and nearly 21.3% over the past three and five-year periods, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSHOX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.78%, which is below the category average of 0.79%.
Fidelity Select Consumer Staples Portfolio fund aims for capital growth. FDFAX invests the majority of its assets in securities of companies primarily engaged in manufacturing, marketing or distribution of consumer staples products. Fidelity Select Consumer Staples Portfolio fund invests in both U.S. and non-U.S. issuers.
Fidelity Select Consumer Staples Portfolio has a history of positive total returns for more than 10 years. Specifically, FDFAX has returned 15.6% and 9% 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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Buy These 3 Funds as Retail Sales Continue to Soar
The retail space is fast getting back on its feet after having slowed down in the latter half of the year. After recording a solid jump in January, retail sales grew once again in February, indicating that the economy is on track for a steady recovery.
According to the latest Mastercard SpendingPulse report, the jump in February’s retail sales came despite rising commodity prices. This shows that people are not hesitant to spend despite rising prices. Moreover, sales have been growing across all categories, driven by e-commerce. Thus, funds like Fidelity Select Retailing Portfolio (FSRPX - Free Report) , Fidelity Select Construction & Housing Portfolio (FSHOX - Free Report) andFidelity Select Consumer Staples Portfolio (FDFAX - Free Report) are likely to benefit in the near term.
Retail Sales Surge
According to the latest Mastercard SpendingPulse report, retail sales grew 8.7% year over year in February and were up 17.3% from the pre-pandemic levels in 2019. In-store sales rose 10% year over year in February.
Sales rose almost across all sections. With more people finally starting to go to office, return-to-office attire sales surged 37.6% year over. This was mainly because most of the people were working form home during this time last year. Also, sales at departmental stores rose 26.3% year over year.
E-commerce, which played a critical role in driving retail sales during the peak of the pandemic, has now become a preferred choice for most. This saw e-online retail sales increasing 4.4% year over year in February and 85.9% from the pre-pandemic levels.
The spending habit of people had changed as a result of the pandemic, which saw them purchasing more commodities than services. However, once the economy began to recover, consumers began to spend on services, reversing the tendency. Restaurant sales increased by 39.4% year over year and 24.2% compared to pre-pandemic levels.
February’s jump in retail sales comes after solid numbers were reported in January. The rise in sales comes despite higher prices and the supply-chain crisis. This also proves that people are ready to spend now and in the coming months too. Additionally, home savings reached a new high in 2021, indicating that consumer spending will increase in the coming months.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to the retail sector that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above factors. 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 Retailing Portfolio fund aims for capital appreciation. FSRPX invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.
Fidelity Select Retailing Portfolio has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 20.9% and nearly 20% over the past three and five-year periods, 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 Construction & Housing Portfolio fund seeks capital growth. FSHOX invests in common stocks and most of its assets in the designing and construction of residential, commercial and industrial facilities etc. As of 1/31/2022, Fidelity Select Construction & Housing Portfolio has an investment of 43.2% of its assets in the retail sector. FSHOX has an investment of 18% of its assets in Home Depot, Inc. (HD) and 17% in Lowe’s Companies, Inc. (LOW), as of 11/30/2021.
Fidelity Select Construction & Housing Portfolio has a history of positive total returns for more than 10 years. Specifically, FSHOX has returned nearly 31.7% and nearly 21.3% over the past three and five-year periods, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSHOX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.78%, which is below the category average of 0.79%.
Fidelity Select Consumer Staples Portfolio fund aims for capital growth. FDFAX invests the majority of its assets in securities of companies primarily engaged in manufacturing, marketing or distribution of consumer staples products. Fidelity Select Consumer Staples Portfolio fund invests in both U.S. and non-U.S. issuers.
Fidelity Select Consumer Staples Portfolio has a history of positive total returns for more than 10 years. Specifically, FDFAX has returned 15.6% and 9% 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. Get it free >>