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3 Funds to Gain as Consumer Confidence Rebounds in September
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Consumer spending is a key driver of the U.S. economy, as two-third of the economy relies on it. Confident consumers indicate higher spending capability and stronger household spending, which in turn can lift the economy. Given the pandemic, millions have lost their jobs. While the job market is slowly rebounding, this steep rise in consumer confidence brings fresh hope.
On Sep 28, the Conference Board reported that the index of consumer confidence jumped to 101.8 in September from the revised figure of 86.3 last month. September’s figure not only beats the consensus estimate of 89.6 but also marks the biggest one-month jump in 17 years.
Additionally, the index that gauges current conditions (how consumers feel about the economy right now) jumped to 98.5 this month from 85.8 in August. The short-term outlook jumped 17.4 points to a three-month high, the highest jump since 2009. In fact, consumers’ short-term outlook for income, business and labor market conditions moved up to 104 in September from 86.6 in the prior month.
In September’s survey, respondents have indicated probabilities of big purchases in the upcoming months. Among the respondents, those expecting to buy major appliances rose to 49% from 44.9% in August, highlighting a seven-month high. Meanwhile, those planning to buy a car increased to 11.8% in September from 10.1% in the preceding month.
Though consumer confidence is still far below the pre-pandemic levels of 132.6, the bounce back in confidence after two straight months of decline suggests that the U.S. economic recovery is still on track. Rise in consumer confidence this month also underlines spending in luxury, leisure goods, housing, new appliances and cars.
3 Fund Picks
Given the positive outlook that American consumers hold for the economy, we have shortlisted three funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to grow. In addition, the minimum initial investment for these funds is within $5,000.
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 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 Leisure Portfolio (FDLSX - Free Report) aims for capital appreciation. This non-diversified fund normally invests majority of its assets in common stocks of companies that are mostly engaged in the design, production, or distribution of goods or services in the leisure industries.
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 8.9% and 9.7% over the past three and five years, respectively. The fund carries a Zacks Mutual Fund Rank #1.
Fidelity Select Retailing Portfolio (FSRPX - Free Report) 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 Sector - Other product has a history of positive total returns for over 10 years. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FSRPX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.74%, which is below the category average of 1.27%. It has returned 26.2% and 19.1% over the past three and five years, respectively.
Fidelity Select Consumer Discretionary Portfolio (FSCPX - Free Report) aims for capital appreciation. The non-diversified fund invests majority of its assets in common stocks of companies that are engaged in the manufacture and distribution of consumer discretionary products and services.
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.
FSCPX has an annual expense ratio of 0.76%, which is below the category average of 1.27%. It has returned 19.3% and 14.8% over the past three and five years, respectively. The fund carries a Zacks Mutual Fund Rank #2.
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3 Funds to Gain as Consumer Confidence Rebounds in September
Consumer spending is a key driver of the U.S. economy, as two-third of the economy relies on it. Confident consumers indicate higher spending capability and stronger household spending, which in turn can lift the economy. Given the pandemic, millions have lost their jobs. While the job market is slowly rebounding, this steep rise in consumer confidence brings fresh hope.
On Sep 28, the Conference Board reported that the index of consumer confidence jumped to 101.8 in September from the revised figure of 86.3 last month. September’s figure not only beats the consensus estimate of 89.6 but also marks the biggest one-month jump in 17 years.
Additionally, the index that gauges current conditions (how consumers feel about the economy right now) jumped to 98.5 this month from 85.8 in August. The short-term outlook jumped 17.4 points to a three-month high, the highest jump since 2009. In fact, consumers’ short-term outlook for income, business and labor market conditions moved up to 104 in September from 86.6 in the prior month.
In September’s survey, respondents have indicated probabilities of big purchases in the upcoming months. Among the respondents, those expecting to buy major appliances rose to 49% from 44.9% in August, highlighting a seven-month high. Meanwhile, those planning to buy a car increased to 11.8% in September from 10.1% in the preceding month.
Though consumer confidence is still far below the pre-pandemic levels of 132.6, the bounce back in confidence after two straight months of decline suggests that the U.S. economic recovery is still on track. Rise in consumer confidence this month also underlines spending in luxury, leisure goods, housing, new appliances and cars.
3 Fund Picks
Given the positive outlook that American consumers hold for the economy, we have shortlisted three funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to grow. In addition, the minimum initial investment for these funds is within $5,000.
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 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 Leisure Portfolio (FDLSX - Free Report) aims for capital appreciation. This non-diversified fund normally invests majority of its assets in common stocks of companies that are mostly engaged in the design, production, or distribution of goods or services in the leisure industries.
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 8.9% and 9.7% over the past three and five years, respectively. The fund carries a Zacks Mutual Fund Rank #1.
Fidelity Select Retailing Portfolio (FSRPX - Free Report) 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 Sector - Other product has a history of positive total returns for over 10 years. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FSRPX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.74%, which is below the category average of 1.27%. It has returned 26.2% and 19.1% over the past three and five years, respectively.
Fidelity Select Consumer Discretionary Portfolio (FSCPX - Free Report) aims for capital appreciation. The non-diversified fund invests majority of its assets in common stocks of companies that are engaged in the manufacture and distribution of consumer discretionary products and services.
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.
FSCPX has an annual expense ratio of 0.76%, which is below the category average of 1.27%. It has returned 19.3% and 14.8% over the past three and five years, respectively. The fund carries a Zacks Mutual Fund Rank #2.
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 >>