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3 Solid Funds to Buy on Rebounding Semiconductor Sales
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The semiconductor industry appears to be making a steady rebound after witnessing a steep decline in sales over the past year. According to the latest report from the Semiconductor Industry Association (SIA), global sales rebounded in April.
The jump in April matches predictions of an initial decline in sales in the first quarter before the market makes a recovery in the second half of 2023. Although challenges remain, demand for semiconductors is expected to remain elevated given the speedy advancement of technologies like artificial intelligence (AI), machine learning, and the Internet of Things.
Thus, funds like Fidelity Select Semiconductors Portfolio (FSELX - Free Report) , Fidelity Advisor Semiconductors Fund Class I (FELIX - Free Report) and Fidelity Advisor Semiconductors Fund (FELAX - Free Report) are likely to benefit in the near term.
Semiconductor Sales Grow
According to the latest report from SIA, semiconductor sales rose 0.3% in April to $40 billion from the March figures of $39.8 billion. April’s growth follows several months of decline, which was predicated long back.
However, year-over-year sales were down 21.6% in April, which shows that the recovery is going slow.
The semiconductor industry had a dream run during the pandemic as remote working and learning boosted demand for personal computers, communication devices, electronic goods and indoor entertainment like video games.
In fact, demand was so high that chipmakers struggled to supply semiconductors, resulting in a shortage of microchips in multiple end-user industries like automobiles, power, lighting and electronics.
The supply shortage worsened as lockdown-induced halts in shipments created industry-wide supply-chain challenges. As the situation improved with the economy reopening, the crisis eased and demand slowed.
Other interrelated issues, such as rising prices, geopolitical tension, and the pandemic's residual impacts posed further challenges. These factors had an effect on consumer spending and created macroeconomic unpredictability, which impacted semiconductor demand.
This saw a rough ride for the industry in 2022. However, 2022 turned out to be the best year for the semiconductor industry, with sales hitting a record high of $573.5 billion in 2022, up 3.2% from $555.9 billion in 2021, according to SIA.
The World Semiconductor Trade Statistics forecasts annual global semiconductor sales to decrease 10.3% in 2023 and rebound with growth of 11.9% or $576 billion in 2024. Thus semiconductor funds are poised to perform well in the near term as the industry continues to recover.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to semiconductor producers 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 Semiconductors Portfolio fund seeks capital appreciation. FSELX normally invests at least 80% of assets in common stocks of companies principally engaged in the design, manufacture, or sale of electronic components (semiconductors, connectors, printed circuit boards, and other components); equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Select Semiconductors Portfolio fund has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 33.3% and 24.7%, respectively. To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
FSELX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.69%, which is below the category average of 1.05%.
Fidelity Advisor Semiconductors Fund Class I seeks capital appreciation. FELIX invests primarily in common stocks. Fidelity Advisor Semiconductors Fund Class I normally invests at least 80% of assets in securities of companies principally engaged in the design, manufacture, or sale of electronic components; equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Advisor Semiconductors Fund Class I has a track of positive total returns for over 10 years. Specifically, FELIX’s returns over the three and five-year benchmarks are 31.6% and 23.7%, respectively. To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
FELIX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.01%, which is below the category average of 1.05%.
Fidelity Advisor Semiconductors Fund seeks capital appreciation. FELAX invests primarily in common stocks. Fidelity Advisor Semiconductors Fund mostly invests at least 80% of its assets in securities of companies primarily engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment.
Fidelity Advisor Semiconductors Fund has a track of positive total returns for over 10 years. Specifically, FELAX’s returns over the three and five-year benchmarks are 31.2% and 23.3%, respectively. To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
FELAX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.01%, which is below the category average of 1.05%.
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3 Solid Funds to Buy on Rebounding Semiconductor Sales
The semiconductor industry appears to be making a steady rebound after witnessing a steep decline in sales over the past year. According to the latest report from the Semiconductor Industry Association (SIA), global sales rebounded in April.
The jump in April matches predictions of an initial decline in sales in the first quarter before the market makes a recovery in the second half of 2023. Although challenges remain, demand for semiconductors is expected to remain elevated given the speedy advancement of technologies like artificial intelligence (AI), machine learning, and the Internet of Things.
Thus, funds like Fidelity Select Semiconductors Portfolio (FSELX - Free Report) , Fidelity Advisor Semiconductors Fund Class I (FELIX - Free Report) and Fidelity Advisor Semiconductors Fund (FELAX - Free Report) are likely to benefit in the near term.
Semiconductor Sales Grow
According to the latest report from SIA, semiconductor sales rose 0.3% in April to $40 billion from the March figures of $39.8 billion. April’s growth follows several months of decline, which was predicated long back.
However, year-over-year sales were down 21.6% in April, which shows that the recovery is going slow.
The semiconductor industry had a dream run during the pandemic as remote working and learning boosted demand for personal computers, communication devices, electronic goods and indoor entertainment like video games.
In fact, demand was so high that chipmakers struggled to supply semiconductors, resulting in a shortage of microchips in multiple end-user industries like automobiles, power, lighting and electronics.
The supply shortage worsened as lockdown-induced halts in shipments created industry-wide supply-chain challenges. As the situation improved with the economy reopening, the crisis eased and demand slowed.
Other interrelated issues, such as rising prices, geopolitical tension, and the pandemic's residual impacts posed further challenges. These factors had an effect on consumer spending and created macroeconomic unpredictability, which impacted semiconductor demand.
This saw a rough ride for the industry in 2022. However, 2022 turned out to be the best year for the semiconductor industry, with sales hitting a record high of $573.5 billion in 2022, up 3.2% from $555.9 billion in 2021, according to SIA.
The World Semiconductor Trade Statistics forecasts annual global semiconductor sales to decrease 10.3% in 2023 and rebound with growth of 11.9% or $576 billion in 2024. Thus semiconductor funds are poised to perform well in the near term as the industry continues to recover.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to semiconductor producers 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 Semiconductors Portfolio fund seeks capital appreciation. FSELX normally invests at least 80% of assets in common stocks of companies principally engaged in the design, manufacture, or sale of electronic components (semiconductors, connectors, printed circuit boards, and other components); equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Select Semiconductors Portfolio fund has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 33.3% and 24.7%, respectively. To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
FSELX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.69%, which is below the category average of 1.05%.
Fidelity Advisor Semiconductors Fund Class I seeks capital appreciation. FELIX invests primarily in common stocks. Fidelity Advisor Semiconductors Fund Class I normally invests at least 80% of assets in securities of companies principally engaged in the design, manufacture, or sale of electronic components; equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Advisor Semiconductors Fund Class I has a track of positive total returns for over 10 years. Specifically, FELIX’s returns over the three and five-year benchmarks are 31.6% and 23.7%, respectively. To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
FELIX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.01%, which is below the category average of 1.05%.
Fidelity Advisor Semiconductors Fund seeks capital appreciation. FELAX invests primarily in common stocks. Fidelity Advisor Semiconductors Fund mostly invests at least 80% of its assets in securities of companies primarily engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment.
Fidelity Advisor Semiconductors Fund has a track of positive total returns for over 10 years. Specifically, FELAX’s returns over the three and five-year benchmarks are 31.2% and 23.3%, respectively. To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
FELAX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.01%, which is below the category average of 1.05%.
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 >>