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3 Solid Funds to Buy as Holiday Season Boosts Retail Sales
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The retail sector has shown tremendous resilience amid price pressures as inflation reached a 40-year-high, compelling the Federal Reserve to adopt an aggressive monetary tightening stance. The Commerce Department reported on Jan 17 that retail sales grew a solid 0.6% in December to close out the year on a high.
The December figures also surpassed analysts’ expectations of a rise of 0.4%, as solid holiday spending drove sales. Retail sales rose 0.3% in November.
Core retail sales, which excludes auto and gas, also jumped 0.6%. Year over year, retail sales surged 5.4%, while core retail sales advanced 4.9%.
Sales rose across a range of categories. Sales at restaurants climbed 11.3% year over year, while month-over-month sales at clothing and accessories stores rose 1.5%
Consumers spent lavishly during the holiday season, boosting overall retail sales, as inflation eased and the Federal Reserve left interest rates steady in its current range of 5.25-5.50% in its December FOMC.
The Fed’s aggressive interest rate hike stance saw inflation decline sharply over the past year. This has led Fed officials to change their stance from hawkish to dovish as they feel that the campaign for interest rate hikes is over.
The Fed is now planning to go for rate cuts in 2024. Market participants are expecting three 25-basis point rate cuts to be implemented in 2024, which definitely bodes well for the retail sector, as lower costs will allow them to spend more freely.
3 Best Choices
We have selected three mutual funds with significant exposure to the retail and discretionary sectors. 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 in identifying 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 Select Retailing Portfolio (FSRPX - Free Report) 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 fund has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 1.9% and 14% over the past three and five-year periods, respectively. Fidelity Select Retailing Portfolio fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.72%, which is below the category average of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Leisure Portfolio (FDLSX - Free Report) fund invests the majority of its assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries. FDLSX uses fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions, for its decisions.
Fidelity Select Leisure & Entertainment fund has a history of positive total returns for more than 10 years. Specifically, FDLSX has returned nearly 10.3% and 15.4% over the past three and five-year periods, respectively. FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.74%, which is below the category average of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Consumer DiscretionaryPortfolio (FSCPX - Free Report) fund invests the majority of its assets in common stocks of companies principally engaged in the manufacture or distribution of consumer discretionaries. FSCPX uses the fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions, for its decisions.
Fidelity Select Consumer Discretionary Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FSCPX has returned nearly 3.3% and 13.7% over the past three and five-year periods, respectively. Fidelity Select Consumer Discretionary Portfolio fund has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.76%, which is below the category average of 0.79%.
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 as Holiday Season Boosts Retail Sales
The retail sector has shown tremendous resilience amid price pressures as inflation reached a 40-year-high, compelling the Federal Reserve to adopt an aggressive monetary tightening stance. The Commerce Department reported on Jan 17 that retail sales grew a solid 0.6% in December to close out the year on a high.
The December figures also surpassed analysts’ expectations of a rise of 0.4%, as solid holiday spending drove sales. Retail sales rose 0.3% in November.
Core retail sales, which excludes auto and gas, also jumped 0.6%. Year over year, retail sales surged 5.4%, while core retail sales advanced 4.9%.
Sales rose across a range of categories. Sales at restaurants climbed 11.3% year over year, while month-over-month sales at clothing and accessories stores rose 1.5%
Consumers spent lavishly during the holiday season, boosting overall retail sales, as inflation eased and the Federal Reserve left interest rates steady in its current range of 5.25-5.50% in its December FOMC.
The Fed’s aggressive interest rate hike stance saw inflation decline sharply over the past year. This has led Fed officials to change their stance from hawkish to dovish as they feel that the campaign for interest rate hikes is over.
The Fed is now planning to go for rate cuts in 2024. Market participants are expecting three 25-basis point rate cuts to be implemented in 2024, which definitely bodes well for the retail sector, as lower costs will allow them to spend more freely.
3 Best Choices
We have selected three mutual funds with significant exposure to the retail and discretionary sectors. 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 in identifying 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 Select Retailing Portfolio (FSRPX - Free Report) 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 fund has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 1.9% and 14% over the past three and five-year periods, respectively. Fidelity Select Retailing Portfolio fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.72%, which is below the category average of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Leisure Portfolio (FDLSX - Free Report) fund invests the majority of its assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries. FDLSX uses fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions, for its decisions.
Fidelity Select Leisure & Entertainment fund has a history of positive total returns for more than 10 years. Specifically, FDLSX has returned nearly 10.3% and 15.4% over the past three and five-year periods, respectively. FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.74%, which is below the category average of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Consumer DiscretionaryPortfolio (FSCPX - Free Report) fund invests the majority of its assets in common stocks of companies principally engaged in the manufacture or distribution of consumer discretionaries. FSCPX uses the fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions, for its decisions.
Fidelity Select Consumer Discretionary Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FSCPX has returned nearly 3.3% and 13.7% over the past three and five-year periods, respectively. Fidelity Select Consumer Discretionary Portfolio fund has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.76%, which is below the category average of 0.79%.
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 >>