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4 Mutual Funds to Buy on the Striking January Jobs Report
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Per the latest Bureau of Labor Statistics report, the US economy added a better-than-expected number of jobs in January. The figure also surpassed estimates as vacancies were created in almost all major sectors of the economy. Further, the unemployment rate was unchanged at 3.6%.
Such a stellar job report calls for investing in mutual funds that have good exposure to the sectors with maximum employment opportunities.
Warm Weather Boosts Job Avenues in January
According to the report, nonfarm payrolls in January rose by 225,000, courtesy of strength in new job roles across construction, healthcare, leisure and hospitality plus transportation and warehousing. Total job creations in January exceeded analysts’ estimates of around 158,000.
Going by the analysts’ views, a major reason behind January’s higher-than-expected job additions could have been warm weather, which drove hiring in construction as well as leisure and hospitality sectors. Also, since interest rates are low, the housing sector is booming on the back of low mortgage rates.
Coming back to the pool of 225,000 new jobs generated last month, this development marks an impressive start to 2020 as about 175,000 job positions were added on average every month last year. January was fairly a good period for new jobs since these additions were broad-based.
Employment in construction rose the most last month (44,000) followed by gains in healthcare, and leisure and hospitality, both of which added 36,000 new jobs each. Transportation and warehousing created 28,000 new vacancies.
About 21,000 new posts popped up in professional and business services while employment in other areas, such as mining, wholesale trade, retail trade, information, financial activities and government were little changed.
4 Best Fund Choices
We have, therefore, selected four mutual funds that invest in the sectors that added the most jobs last month and carry a Zacks Mutual Fund Rank #1 (Strong Buy). In addition, the minimum initial investment for these funds is within $5,000.
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 Real Estate Investment Portfolio (FRESX - Free Report) aims for more-than-average income and capital appreciation over the long-term. The fund invests the majority of its assets in securities of companies mostly engaged in the real estate industry and other real estate related investments. The non-diversified fund invests in securities of both U.S. and non-U.S. companies. FRESX mostly invests in common stocks.
This Zacks sector – Real Estate has a history of positive total returns for more than 10 years. 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%, which is below the category average of 1.22%. It has returned 25.2% over a year. The fund has no minimum initial investment.
DWS RREEF Real Estate Securities Fund - Class A (RRRAX - Free Report) seeks long-term capital growth and current income. The fund invests the majority of its assets in equity securities of real estate investment trusts and real estate companies. RRRAX is a non-diversified fund.
This Zacks sector – Real Estate has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
RRRAX has an annual expense ratio of 0.97%, which is below the category average of 1.22%. It has returned 29.1% over a year. The fund has a minimum initial investment of $1000.
Fidelity Select Leisure Portfolio (FDLSX - Free Report) aims for capital growth. The fund invests the majority of its assets in securities of companies that are engaged in design, production, or distribution of goods or services in the leisure industries. The non-diversified fund invests in domestic and foreign issuers alike.
This Zacks sector – Other has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FDLSX has an annual expense ratio of 0.76%, which is below the category average of 1.27%. It has returned 28.7% over a year. The fund has no minimum initial investment.
Franklin Biotechnology Discovery Fund Class A (FBDIX - Free Report) invests the majority of its assets in securities of biotechnology companies and discovery research firms. The non-diversified fund aims for capital growth. FBDIX may also invest a small portion of its assets in equity or debt securities of any type of issuer.
This Zacks sector – Health has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FBDIX has an annual expense ratio of 1.02%, which is below the category average of 1.24%. It has returned 34.8% over a year. The fund has a minimum initial investment of $1000.
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4 Mutual Funds to Buy on the Striking January Jobs Report
Per the latest Bureau of Labor Statistics report, the US economy added a better-than-expected number of jobs in January. The figure also surpassed estimates as vacancies were created in almost all major sectors of the economy. Further, the unemployment rate was unchanged at 3.6%.
Such a stellar job report calls for investing in mutual funds that have good exposure to the sectors with maximum employment opportunities.
Warm Weather Boosts Job Avenues in January
According to the report, nonfarm payrolls in January rose by 225,000, courtesy of strength in new job roles across construction, healthcare, leisure and hospitality plus transportation and warehousing. Total job creations in January exceeded analysts’ estimates of around 158,000.
Going by the analysts’ views, a major reason behind January’s higher-than-expected job additions could have been warm weather, which drove hiring in construction as well as leisure and hospitality sectors. Also, since interest rates are low, the housing sector is booming on the back of low mortgage rates.
Coming back to the pool of 225,000 new jobs generated last month, this development marks an impressive start to 2020 as about 175,000 job positions were added on average every month last year. January was fairly a good period for new jobs since these additions were broad-based.
Employment in construction rose the most last month (44,000) followed by gains in healthcare, and leisure and hospitality, both of which added 36,000 new jobs each. Transportation and warehousing created 28,000 new vacancies.
About 21,000 new posts popped up in professional and business services while employment in other areas, such as mining, wholesale trade, retail trade, information, financial activities and government were little changed.
4 Best Fund Choices
We have, therefore, selected four mutual funds that invest in the sectors that added the most jobs last month and carry a Zacks Mutual Fund Rank #1 (Strong Buy). In addition, the minimum initial investment for these funds is within $5,000.
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 Real Estate Investment Portfolio (FRESX - Free Report) aims for more-than-average income and capital appreciation over the long-term. The fund invests the majority of its assets in securities of companies mostly engaged in the real estate industry and other real estate related investments. The non-diversified fund invests in securities of both U.S. and non-U.S. companies. FRESX mostly invests in common stocks.
This Zacks sector – Real Estate has a history of positive total returns for more than 10 years. 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%, which is below the category average of 1.22%. It has returned 25.2% over a year. The fund has no minimum initial investment.
DWS RREEF Real Estate Securities Fund - Class A (RRRAX - Free Report) seeks long-term capital growth and current income. The fund invests the majority of its assets in equity securities of real estate investment trusts and real estate companies. RRRAX is a non-diversified fund.
This Zacks sector – Real Estate has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
RRRAX has an annual expense ratio of 0.97%, which is below the category average of 1.22%. It has returned 29.1% over a year. The fund has a minimum initial investment of $1000.
Fidelity Select Leisure Portfolio (FDLSX - Free Report) aims for capital growth. The fund invests the majority of its assets in securities of companies that are engaged in design, production, or distribution of goods or services in the leisure industries. The non-diversified fund invests in domestic and foreign issuers alike.
This Zacks sector – Other has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FDLSX has an annual expense ratio of 0.76%, which is below the category average of 1.27%. It has returned 28.7% over a year. The fund has no minimum initial investment.
Franklin Biotechnology Discovery Fund Class A (FBDIX - Free Report) invests the majority of its assets in securities of biotechnology companies and discovery research firms. The non-diversified fund aims for capital growth. FBDIX may also invest a small portion of its assets in equity or debt securities of any type of issuer.
This Zacks sector – Health has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FBDIX has an annual expense ratio of 1.02%, which is below the category average of 1.24%. It has returned 34.8% over a year. The fund has a minimum initial investment of $1000.
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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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