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According to the latest report from U.S. Labor Department, the U.S. economy witnessed an astounding number of job additions in February. The figure not only surpassed expectations but also hit its highest level in as many as 20 months. Normalizing weather conditions and the newly implemented tax reforms have been pivotal in boosting hiring in the United States.
Sectors such as manufacturing, finance, business services and retail have been burgeoning of late and added the most number of jobs to the economy. Under such favorable circumstances investing in mutual funds from these sectors is a prudent decision.
Hiring in U.S. at Full Throttle
While harsh winters during the December-January period rendered the majority of people out of jobs, improving weather conditions reinstated hiring across industries in the United States. Further, the new tax law, deemed business-friendly by the majority of employers, also boosted job creation.
Wage growth however has been modest, which cooled down the frenzy around inflation and rate hikes that had kept employers on toes for quite some time. With businesses springing back to normal, employers are literally on a hiring spree. Such conditions led to a staggering number of job additions to the economy in February.
Per the latest report, a total of 313,000 jobs were added to the economy in February — the strongest figures since July 2016. The figure surged past the consensus estimate of 208,000.
Coming to the figures, the manufacturing businesses created 31,000 jobs last month, significantly contributing to the industry’s 224,000 job creations over the last 12 months. Industries related to business services and financial activities were responsible for the creation of 50,000 and 28,000 new jobs, respectively.
Significant contributions also came from the retail industry, where roughly 50,000 new jobs were added. Clothing and general merchandise stores employed more workers, which attributed to the outperformance of the industry. Contributions from the retail space were significant in the last few months witnessed both hiring and lay-offs in the industry.
February’s rise in nonfarm payrolls means that the labor force participation rate, which reflects Americans looking for jobs or those working, has spiked 0.3 percentage points to 63%. This turned out to be the best one-month gain in almost eight years since the recovery of the U.S. economy from the Great Recession.
Unemployment Still at 17-Year Low
During February, the unemployment rate was recorded at 4.1%, the same as the prior five months. With this, the rate remained at a 17-year low mark. The civilian labor force jumped by 806,000 during the last month, of which 97% were hired, announced Jefferies, a global investment bank.
February’s average hourly wage grew 0.1% sequentially, lower than 0.3% growth in January. Against this backdrop, hourly earnings climbed 2.6% year over year in February, below wage growth of 2.8% for January. Also, the hourly earnings growth of January was revised lower at 2.9%.
5 Hot Choices
Given such circumstances, we have highlighted five mutual funds that are poised to gain significantly from the latest hiring spree in the United States. These funds also carry a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (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 multiple commission charges that are associated with stock purchases are the primary reasons why investors should park their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Industrials Fund (FCYIX - Free Report) seeks capital appreciation. FCYIX normally invests at least 80% of the 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's returns over the three and five-year benchmarks are 13.6% and 14.7%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here .
Zacks Rank #1 FCYIX has an annual expense ratio of 0.77%, which is below the category average of 1.29%.
Fidelity Select Construction & Housing Portfolio (FSHOX - Free Report) invests the major portion of its assets in securities of companies involved in construction and design of commercial, residential and industrial facilities. The fund seeks growth of capital. FSHOX invests mainly in common stocks of both U.S. and non-U.S. companies.
This Sector - Other product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 13.2% and 13.7%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Zacks Rank #2 FSHOX has an annual expense ratio of 0.79%, which is below the category average of 1.21%.
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 Technology Fund (FSPTX - Free Report) seeks capital appreciation. Normally, FSPTX invests at least 80% of the assets in common stocks of companies principally engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements.
This Sector – Tech 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.
FSPTX has a Zacks Rank #2 and an annual expense ratio of 0.76%, which is below the category average of 1.40%.
Fidelity Select Consumer Discretionary Portfolio Fund (FSCPX - Free Report) invests in large-blend companies. The objective of FSCPX is to seek capital appreciation. FSCPX normally invests at least 80% of its assets in common stocks of companies principally engaged in the manufacture and distribution of goods and services to both domestic and international consumers.
This Sector – Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 14.9% over the three-year and 16.6% 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.
FSCPX has a Zacks Rank #1 and an annual expense ratio of 0.76%, which is below the category average of 1.35%.
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5 Funds to Buy as Hiring Hits Record High
According to the latest report from U.S. Labor Department, the U.S. economy witnessed an astounding number of job additions in February. The figure not only surpassed expectations but also hit its highest level in as many as 20 months. Normalizing weather conditions and the newly implemented tax reforms have been pivotal in boosting hiring in the United States.
Sectors such as manufacturing, finance, business services and retail have been burgeoning of late and added the most number of jobs to the economy. Under such favorable circumstances investing in mutual funds from these sectors is a prudent decision.
Hiring in U.S. at Full Throttle
While harsh winters during the December-January period rendered the majority of people out of jobs, improving weather conditions reinstated hiring across industries in the United States. Further, the new tax law, deemed business-friendly by the majority of employers, also boosted job creation.
Wage growth however has been modest, which cooled down the frenzy around inflation and rate hikes that had kept employers on toes for quite some time. With businesses springing back to normal, employers are literally on a hiring spree. Such conditions led to a staggering number of job additions to the economy in February.
Per the latest report, a total of 313,000 jobs were added to the economy in February — the strongest figures since July 2016. The figure surged past the consensus estimate of 208,000.
Coming to the figures, the manufacturing businesses created 31,000 jobs last month, significantly contributing to the industry’s 224,000 job creations over the last 12 months. Industries related to business services and financial activities were responsible for the creation of 50,000 and 28,000 new jobs, respectively.
Significant contributions also came from the retail industry, where roughly 50,000 new jobs were added. Clothing and general merchandise stores employed more workers, which attributed to the outperformance of the industry. Contributions from the retail space were significant in the last few months witnessed both hiring and lay-offs in the industry.
February’s rise in nonfarm payrolls means that the labor force participation rate, which reflects Americans looking for jobs or those working, has spiked 0.3 percentage points to 63%. This turned out to be the best one-month gain in almost eight years since the recovery of the U.S. economy from the Great Recession.
Unemployment Still at 17-Year Low
During February, the unemployment rate was recorded at 4.1%, the same as the prior five months. With this, the rate remained at a 17-year low mark. The civilian labor force jumped by 806,000 during the last month, of which 97% were hired, announced Jefferies, a global investment bank.
February’s average hourly wage grew 0.1% sequentially, lower than 0.3% growth in January. Against this backdrop, hourly earnings climbed 2.6% year over year in February, below wage growth of 2.8% for January. Also, the hourly earnings growth of January was revised lower at 2.9%.
5 Hot Choices
Given such circumstances, we have highlighted five mutual funds that are poised to gain significantly from the latest hiring spree in the United States. These funds also carry a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (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 multiple commission charges that are associated with stock purchases are the primary reasons why investors should park their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Industrials Fund (FCYIX - Free Report) seeks capital appreciation. FCYIX normally invests at least 80% of the 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's returns over the three and five-year benchmarks are 13.6% and 14.7%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here .
Zacks Rank #1 FCYIX has an annual expense ratio of 0.77%, which is below the category average of 1.29%.
Fidelity Select Construction & Housing Portfolio (FSHOX - Free Report) invests the major portion of its assets in securities of companies involved in construction and design of commercial, residential and industrial facilities. The fund seeks growth of capital. FSHOX invests mainly in common stocks of both U.S. and non-U.S. companies.
This Sector - Other product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and five-year benchmarks are 13.2% and 13.7%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Zacks Rank #2 FSHOX has an annual expense ratio of 0.79%, which is below the category average of 1.21%.
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 Technology Fund (FSPTX - Free Report) seeks capital appreciation. Normally, FSPTX invests at least 80% of the assets in common stocks of companies principally engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements.
This Sector – Tech 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.
FSPTX has a Zacks Rank #2 and an annual expense ratio of 0.76%, which is below the category average of 1.40%.
Fidelity Select Consumer Discretionary Portfolio Fund (FSCPX - Free Report) invests in large-blend companies. The objective of FSCPX is to seek capital appreciation. FSCPX normally invests at least 80% of its assets in common stocks of companies principally engaged in the manufacture and distribution of goods and services to both domestic and international consumers.
This Sector – Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 14.9% over the three-year and 16.6% 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.
FSCPX has a Zacks Rank #1 and an annual expense ratio of 0.76%, which is below the category average of 1.35%.
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 >>