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The Conference Board Leading Economic Index improved for the third successive month in January, giving clear signals of stepped up economic activity. Much of the increase can be attributed to burgeoning manufacturing activity even as the economy is near full employment. Also, the recent trend in jobless claims has seen a steep decline.
The leading economic indicator which tracks about 10 economic metrics of the U.S. economy including industrial, financial and real estate surged for the third straight month in January. Thus, investing in mutual funds having significant exposure in such areas seems prudent.
U.S. Leading Economic Indicators Tick Up Again
The Conference Board Leading Economic Index (LEI) rose 1% last month, which follows a rise of 0.6% in January and 0.4% in February.
Such an increase in LEI was made possible by rise in manufacturing activity, improving stock prices and 45-year low average weekly unemployment claims. Also, a change in consumer prices for services helped the index. Consumer price for services is the ratio of consumer installment credit outstanding to personal income and the average prime rate charged by banks. Finally, strength in residential construction has also impacted the index positively.
A surge in the LEI for the third successive month points to robust economic growth in the first half of 2018. According to Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board, the recent stock market volatility will not be reflected in the U.S. LEI until the next month. He also stated that consumers and business-owners are both highly optimistic about the economy, which has improved continuously for several months now.
Further, this gain marks the LEI’s 12th increase in the last 13 months, with September 2017 being the only month when the index declined. Meanwhile, The Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.1% in January to 103.0, which follows a 0.3% increase in December and a 0.2% increase in November. A surge in CEI also implies increased industrial production, improved GDP and burgeoning manufacturing activity within the economy.
4 Best Funds to Buy
Given such circumstances, we have highlighted four mutual funds that are poised to gain significantly due to robust economic growth within the U.S. economy. These funds also carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging three and one-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 Advisor Financial Services I (FFSIX - Free Report) seeks growth of capital and invests primarily in common stocks. It invests the lion’s share of its assets in securities of companies which provide financial and related services to both consumers as well as the industry. FFSIX invests both in U.S. as well as non-U.S. companies.
This Sector – Finance product has a history of positive total returns for over 10 years. Specifically, the fund has returned 16% over the three-year and 15.3% 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.
FFSIX has a Zacks Rank #2 and an annual expense ratio of 0.83%, which is below the category average of 1.45%.
Fidelity Select Industrial Equip Port seeks capital appreciation. The fund normally invests the lion’s share of its assets in common stocks of companies involved in the manufacture, distribution and service of products and equipment for the industrial sector.
This Sector – Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 14.3% over the three-year and 12.7% 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.
FSCGX has a Zacks Rank #2 and an annual expense ratio of 0.83%, which is below the category average of 1.16%.
Fidelity Select Industrials Fund (FCYIX - Free Report) seeks capital appreciation. FCYIX normally invests at least 80% of assets in common stocks of companies principally engaged in the research, development, manufacture, distribution, supply, or sale of materials, equipment, products, or services related to cyclical industries.
This Sector – Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 13.6% over the three-year and 14.7% 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.
FCYIX has a Zacks Rank #1 and an annual expense ratio of 0.77%, which is below the category average of 1.29%.
Fidelity Advisor International Real Estate Fund Class I (FIRIX - Free Report) seeks to invest mainly in foreign securities. The fund invests a bulk of its assets in securities of companies involved in the real estate industry as well as real estate-related investments. It allocates investments across the globe in different countries and regions.
This Sector – Real Estate product has a history of positive total returns for over 10 years. Specifically, the fund has returned 9.1% over the three-year and 8.7% 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.
FIRIX has a Zacks Rank #1 and an annual expense ratio of 0.95%, which is below the category average of 1.33%.
Image: Bigstock
4 Funds to Ride on Robust Economic Growth
The Conference Board Leading Economic Index improved for the third successive month in January, giving clear signals of stepped up economic activity. Much of the increase can be attributed to burgeoning manufacturing activity even as the economy is near full employment. Also, the recent trend in jobless claims has seen a steep decline.
The leading economic indicator which tracks about 10 economic metrics of the U.S. economy including industrial, financial and real estate surged for the third straight month in January. Thus, investing in mutual funds having significant exposure in such areas seems prudent.
U.S. Leading Economic Indicators Tick Up Again
The Conference Board Leading Economic Index (LEI) rose 1% last month, which follows a rise of 0.6% in January and 0.4% in February.
Such an increase in LEI was made possible by rise in manufacturing activity, improving stock prices and 45-year low average weekly unemployment claims. Also, a change in consumer prices for services helped the index. Consumer price for services is the ratio of consumer installment credit outstanding to personal income and the average prime rate charged by banks. Finally, strength in residential construction has also impacted the index positively.
A surge in the LEI for the third successive month points to robust economic growth in the first half of 2018. According to Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board, the recent stock market volatility will not be reflected in the U.S. LEI until the next month. He also stated that consumers and business-owners are both highly optimistic about the economy, which has improved continuously for several months now.
Further, this gain marks the LEI’s 12th increase in the last 13 months, with September 2017 being the only month when the index declined. Meanwhile, The Conference Board Coincident Economic Index (CEI) for the U.S. increased 0.1% in January to 103.0, which follows a 0.3% increase in December and a 0.2% increase in November. A surge in CEI also implies increased industrial production, improved GDP and burgeoning manufacturing activity within the economy.
4 Best Funds to Buy
Given such circumstances, we have highlighted four mutual funds that are poised to gain significantly due to robust economic growth within the U.S. economy. These funds also carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging three and one-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 Advisor Financial Services I (FFSIX - Free Report) seeks growth of capital and invests primarily in common stocks. It invests the lion’s share of its assets in securities of companies which provide financial and related services to both consumers as well as the industry. FFSIX invests both in U.S. as well as non-U.S. companies.
This Sector – Finance product has a history of positive total returns for over 10 years. Specifically, the fund has returned 16% over the three-year and 15.3% 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.
FFSIX has a Zacks Rank #2 and an annual expense ratio of 0.83%, which is below the category average of 1.45%.
Fidelity Select Industrial Equip Port seeks capital appreciation. The fund normally invests the lion’s share of its assets in common stocks of companies involved in the manufacture, distribution and service of products and equipment for the industrial sector.
This Sector – Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 14.3% over the three-year and 12.7% 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.
FSCGX has a Zacks Rank #2 and an annual expense ratio of 0.83%, which is below the category average of 1.16%.
Fidelity Select Industrials Fund (FCYIX - Free Report) seeks capital appreciation. FCYIX normally invests at least 80% of assets in common stocks of companies principally engaged in the research, development, manufacture, distribution, supply, or sale of materials, equipment, products, or services related to cyclical industries.
This Sector – Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 13.6% over the three-year and 14.7% 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.
FCYIX has a Zacks Rank #1 and an annual expense ratio of 0.77%, which is below the category average of 1.29%.
Fidelity Advisor International Real Estate Fund Class I (FIRIX - Free Report) seeks to invest mainly in foreign securities. The fund invests a bulk of its assets in securities of companies involved in the real estate industry as well as real estate-related investments. It allocates investments across the globe in different countries and regions.
This Sector – Real Estate product has a history of positive total returns for over 10 years. Specifically, the fund has returned 9.1% over the three-year and 8.7% 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.
FIRIX has a Zacks Rank #1 and an annual expense ratio of 0.95%, which is below the category average of 1.33%.
To view the Zacks Rank and past performance of all large-cap growth mutual funds, investors can click here to see the complete list of funds.
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