We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Funds to Buy as Manufacturing Sector Continues to Grow
Read MoreHide Full Article
The U.S. manufacturing sector expanded in February, indicating that the economy is on track for a steady recovery. The growth comes despite acute labor shortage and supply chain crisis. However, February’s growth is also an indication that the trajectory for this year is positive given that the sector has been on a steady expansion mode ever since the economy reopened, following the coronavirus-induced lockdown.
February’s expansion also indicates that the sector has the potential to perform well despite several roadblocks. Thus, funds like Fidelity Select Industrials Portfolio (FCYIX - Free Report) , Fidelity Select Chemicals Portfolio (FSCHX - Free Report) and Fidelity Select Automotive Portfolio (FSAVX - Free Report) are likely to benefit in the near term.
Manufacturing Sector Expands
February’s Institute for Supply Management (ISM) Manufacturing Index came up with a reading of 58.6%, marking a rise of 1% form January’s reading of 57.8%. Manufacturing activity has expanded for 21 consecutive months after a contraction in April and May 2020, when industries had to be locked down due to the onset of the pandemic.
February’s growth once again proves the underlying strength in the nation’s economy and how the sector has continued to expand despite challenges like labor shortage, supply-chain crisis and rising prices of raw materials.
One of the major reasons for February’s jump was growing demand and consumption. The Production Index rose to 58.5 in February from January’s 58.8. The New Orders Index rose to 61.7 in February from 57.9 in January and marked the best level since September.
The pressure of rising costs somewhat eased in February, with the Prices Index declining to 75.6 in February from 76.1 in January. Manufacturers are hiking wages to fill in record vacancies, but labor shortage is expected to impede higher productivity and growth in the coming months. Furthermore, supply-chain restrictions are acute and still developing.
However, rising demand and consumption should continue to help the manufacturing sector.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to the manufacturing sector, each carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain from such factors. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Industrials Portfolio fund aims for capital appreciation. This fund invests typically a large portion of its assets in the common stock of companies, principally engaged in the research, development, manufacture, distribution, supply, or sale of industrial materials, equipment, products, or services. FCYIX is a non-diversified fund.
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.
Fidelity Select Industrials Portfolio has a Zacks Mutual Fund Rank #1. FCYIX has returned 11.4% and 8.9% over the past three and five years, respectively.
Fidelity Select Chemicals Portfolio fund aims for capital appreciation. The fund typically invests the majority of its assets in common stocks of companies, principally engaged in the research, development, manufacture, or marketing of products or services related to the chemical process industries. FSCHX is a non-diversified fund.
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.
Fidelity Select Chemicals Portfolio has a Zacks Mutual Fund Rank #1. FSCHX has returned 13.2% and 8.6% over the past three and five years, respectively.
Fidelity Select Automotive Portfolio fund aims for capital appreciation. FSAVX invests most of its assets in common stocks of companies engaged in manufacturing automobiles, trucks, specialty vehicles, parts, tires, and related services.
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.
Fidelity Select Automotive Portfolio has a Zacks Mutual Fund Rank #2. FSAVX has returned 30.8% and 20.1% over the past three and five years, respectively.
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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Funds to Buy as Manufacturing Sector Continues to Grow
The U.S. manufacturing sector expanded in February, indicating that the economy is on track for a steady recovery. The growth comes despite acute labor shortage and supply chain crisis. However, February’s growth is also an indication that the trajectory for this year is positive given that the sector has been on a steady expansion mode ever since the economy reopened, following the coronavirus-induced lockdown.
February’s expansion also indicates that the sector has the potential to perform well despite several roadblocks. Thus, funds like Fidelity Select Industrials Portfolio (FCYIX - Free Report) , Fidelity Select Chemicals Portfolio (FSCHX - Free Report) and Fidelity Select Automotive Portfolio (FSAVX - Free Report) are likely to benefit in the near term.
Manufacturing Sector Expands
February’s Institute for Supply Management (ISM) Manufacturing Index came up with a reading of 58.6%, marking a rise of 1% form January’s reading of 57.8%. Manufacturing activity has expanded for 21 consecutive months after a contraction in April and May 2020, when industries had to be locked down due to the onset of the pandemic.
February’s growth once again proves the underlying strength in the nation’s economy and how the sector has continued to expand despite challenges like labor shortage, supply-chain crisis and rising prices of raw materials.
One of the major reasons for February’s jump was growing demand and consumption. The Production Index rose to 58.5 in February from January’s 58.8. The New Orders Index rose to 61.7 in February from 57.9 in January and marked the best level since September.
The pressure of rising costs somewhat eased in February, with the Prices Index declining to 75.6 in February from 76.1 in January. Manufacturers are hiking wages to fill in record vacancies, but labor shortage is expected to impede higher productivity and growth in the coming months. Furthermore, supply-chain restrictions are acute and still developing.
However, rising demand and consumption should continue to help the manufacturing sector.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to the manufacturing sector, each carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain from such factors. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Industrials Portfolio fund aims for capital appreciation. This fund invests typically a large portion of its assets in the common stock of companies, principally engaged in the research, development, manufacture, distribution, supply, or sale of industrial materials, equipment, products, or services. FCYIX is a non-diversified fund.
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.
Fidelity Select Industrials Portfolio has a Zacks Mutual Fund Rank #1. FCYIX has returned 11.4% and 8.9% over the past three and five years, respectively.
Fidelity Select Chemicals Portfolio fund aims for capital appreciation. The fund typically invests the majority of its assets in common stocks of companies, principally engaged in the research, development, manufacture, or marketing of products or services related to the chemical process industries. FSCHX is a non-diversified fund.
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.
Fidelity Select Chemicals Portfolio has a Zacks Mutual Fund Rank #1. FSCHX has returned 13.2% and 8.6% over the past three and five years, respectively.
Fidelity Select Automotive Portfolio fund aims for capital appreciation. FSAVX invests most of its assets in common stocks of companies engaged in manufacturing automobiles, trucks, specialty vehicles, parts, tires, and related services.
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.
Fidelity Select Automotive Portfolio has a Zacks Mutual Fund Rank #2. FSAVX has returned 30.8% and 20.1% over the past three and five years, respectively.
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 >>