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Commodity prices are still sky-high but consumers have been spending on essentials, which is driving retail sales. The retail sector has been suffering over the past year as rising prices have crippled consumer spending. However, the sector has still managed to survive as sales have fairly been on the rise almost every month.
A resilient labor market, which is also boosting personal income, has been majorly helping the sector. Despite soaring prices, demand remains high, which is boosting sales. Thus, funds likeFidelity Advisor Consumer Staples Fund Class A (FDAGX - Free Report) , Fidelity Select Consumer Staples Portfolio (FDFAX - Free Report) and Fidelity Select Retailing Portfolio (FSRPX - Free Report) , are likely to benefit in the near term.
Retail Sales Rebound
Retail sales, which had been slowing over the past few months, are slowly rebounding. According to the latest Mastercard SpendingPulse, retail sales in the United States jumped 4.7% in March on a year-over-year basis. Although nominal spending was slightly lower than in February, spending trends in March were almost consistent with those seen earlier this year, according to the report.
E-commerce, which has been supporting the retail sector ever since the COVID-19 outbreak, once again played a major role in driving sales. Millions of people decided to shop from home throughout the pandemic on concerns about contracting the COVID-19 virus. As a result, they finally realized the advantages of Internet buying. The trend has continued ever since and has considerably benefited the retail sector.
The report said that online sales increased 13% year over year. In-store sales rose 2.8%. Sales at restaurants jumped 11.6%, while grocery sales grew 5.6%.
Another reason behind the steady growth in retail sales is solid job additions to the economy. According to the Labor Department, nonfarm payrolls jumped a solid 236,000 in March. In spite of increasing inflationary pressure, the labor market has held up well, helping people to spend freely because more jobs mean more pay.
3 Best Choices
We have selected three mutual funds with significant exposure to the retail sector. The funds carry either a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above 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 fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also 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 Advisor Consumer Staples Fund Class A aims for capital growth. FDAGX invests the majority of its assets in securities of companies that manufacture and market consumer staples products. Fidelity Advisor Consumer Staples Fund Class A primarily invests in common stocks of companies.
Fidelity Advisor Consumer Staples Fund Class A has a history of positive total returns for more than 10 years. Specifically, FDAGX has returned nearly 10.7% and 7.5% over the past three and five-year periods, respectively. FDAGX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Consumer Staples Portfolio fund aims for capital growth. FDFAX invests the majority of its 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 11.1% 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.
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 10.8% and nearly 9.2% over the past three and five-year periods, respectively. FSRPX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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3 Solid Funds to Buy on Growing Retail Sales
Commodity prices are still sky-high but consumers have been spending on essentials, which is driving retail sales. The retail sector has been suffering over the past year as rising prices have crippled consumer spending. However, the sector has still managed to survive as sales have fairly been on the rise almost every month.
A resilient labor market, which is also boosting personal income, has been majorly helping the sector. Despite soaring prices, demand remains high, which is boosting sales. Thus, funds likeFidelity Advisor Consumer Staples Fund Class A (FDAGX - Free Report) , Fidelity Select Consumer Staples Portfolio (FDFAX - Free Report) and Fidelity Select Retailing Portfolio (FSRPX - Free Report) , are likely to benefit in the near term.
Retail Sales Rebound
Retail sales, which had been slowing over the past few months, are slowly rebounding. According to the latest Mastercard SpendingPulse, retail sales in the United States jumped 4.7% in March on a year-over-year basis. Although nominal spending was slightly lower than in February, spending trends in March were almost consistent with those seen earlier this year, according to the report.
E-commerce, which has been supporting the retail sector ever since the COVID-19 outbreak, once again played a major role in driving sales. Millions of people decided to shop from home throughout the pandemic on concerns about contracting the COVID-19 virus. As a result, they finally realized the advantages of Internet buying. The trend has continued ever since and has considerably benefited the retail sector.
The report said that online sales increased 13% year over year. In-store sales rose 2.8%. Sales at restaurants jumped 11.6%, while grocery sales grew 5.6%.
Another reason behind the steady growth in retail sales is solid job additions to the economy. According to the Labor Department, nonfarm payrolls jumped a solid 236,000 in March. In spite of increasing inflationary pressure, the labor market has held up well, helping people to spend freely because more jobs mean more pay.
3 Best Choices
We have selected three mutual funds with significant exposure to the retail sector. The funds carry either a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above 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 fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also 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 Advisor Consumer Staples Fund Class A aims for capital growth. FDAGX invests the majority of its assets in securities of companies that manufacture and market consumer staples products. Fidelity Advisor Consumer Staples Fund Class A primarily invests in common stocks of companies.
Fidelity Advisor Consumer Staples Fund Class A has a history of positive total returns for more than 10 years. Specifically, FDAGX has returned nearly 10.7% and 7.5% over the past three and five-year periods, respectively. FDAGX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Consumer Staples Portfolio fund aims for capital growth. FDFAX invests the majority of its 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 11.1% 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.
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 10.8% and nearly 9.2% over the past three and five-year periods, respectively. FSRPX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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 >>