Rising prices has been a major concern of late, which has seen the Fed increasing interest rates for the first time in more than two years. Even then, consumer confidence increased in March, which is an indication that people have faith in the economy and the rise in interest rates hasn’t impacted much.
Also, retail sales grew in February, which shows that people are willing to spend despite rising prices. Hence, people are not only confident but also are willing to spend, which definitely is a good sign. Given this scenario, people can bet on some top-ranked retail and consumer discretionary funds like
Fidelity Select Consumer Staples Portfolio ( FDFAX Quick Quote FDFAX - Free Report) , Fidelity Select Retailing Portfolio ( FSRPX Quick Quote FSRPX - Free Report) and Fidelity Select Construction & Housing Portfolio ( FSHOX Quick Quote FSHOX - Free Report) . Consumer Confidence Jumps in March
The Conference Board said on Mar 29 that U.S. consumer confidence rose in March to 107.2 from 105.7 in February. The present situation index, which is a measure of how consumers assess the present business and labor conditions, also increased to 153 in March from 143 recorded in the previous month.
This is an indication that consumers have immense faith in the economy and are hopeful about the future despite rising costs. Rising costs have been a worrying factor with inflation hitting a 40-year high earlier this month.
This saw the Fed increase interest rates by 0.25 basis points to combat inflation. The central bank has also indicated that there will be at least four interest rate hikes this year. This has somewhat left investors worried but the latest reading from the Consumer Board indicates that they haven’t lost confidence and are willing to spend.
Another sign of there soaring confidence is the rise in February retail sales. Retail sales increased 0.3% in February. One of the main reasons behind this is that people are getting back to work and have once again started earning after staying home for months. This has seen a rise in personal income. According to the Commerce Department, personal income in the United States increased 0.5% in February.
Higher personal income is giving people more purchasing power, which eventually is playing a major role in boosting their confidence.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to the retail and consumer discretionary sector 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.
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 Select Consumer Staples Portfolio fund aims for capital growth. FDFAX invests the majority of assets in securities of companies primarily engaged in manufacturing, marketing or distribution of consumer staples products. Fidelity Select Consumer Staples Portfolio fund invests in both U.S. and non-U.S. issuers.
Fidelity Select Consumer Staples Portfolio has a history of positive total returns for more than 10 years. Specifically, FDFAX has returned 13.9% and 7.8% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds,
please click here.
FDFAX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.75% versus the category average of 0.76%.
Fidelity Select Retailing Portfolio fund aims for capital appreciation. FSRPX invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.
Fidelity Select Retailing Portfolio has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 19.1% and nearly 18.4% over the past three and five-year periods, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds,
please click here.
FSRPX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73%, which is below the category average of 0.79%.
Fidelity Select Construction & Housing Portfolio fund seeks capital growth. FSHOX invests in common stocks and most of its assets in the designing and construction of residential, commercial and industrial facilities etc.
Fidelity Select Construction & Housing Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FSHOX has returned 26.8% and 18.7% over the past three and five years, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds,
please click here.
FSHOX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.78%, which is below the category average of 0.79%.
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 >>