The Federal Reserve’s interest-rate easing, decline in inflation numbers, and a resilient labor market have created a favorable investment environment for market participants. The Fed has successfully brought down inflation close to its 2% target without derailing the economy. This has restored confidence, and investors are expecting further reductions in borrowing costs in the coming months. Such moves will ease the interest rate burden on American businesses and increase profitability.

The producer price index (PPI) for final demand remained unchanged month over month at 0.2% in September, which is in line with Wall Street's expectations.  The nonfarm payrolls grew a solid 254,000, and the unemployment rate fell to 4.1%, indicating resilience in the labor market. Retail sales rose 0.4% in September, more than the street’s expectation of 0.3%. The cooling of inflation and strength in the labor market will provide room for the Fed to act according to its plan of gradually bringing back the key interest rates to the 2.75-3% rangeby 2026.

With a long-term perspective in mind, mutual fund investing can help those who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds. Fidelity mutual funds like Fidelity Advisor Semiconductors (FIKGX Quick QuoteFIKGX - Free Report) , Fidelity Advisor Energy (FIKAX Quick QuoteFIKAX - Free Report) , Fidelity Select Insurance Portfolio (FSPCX Quick QuoteFSPCX - Free Report) , Fidelity Select Utilities Portfolio (FSUTX Quick QuoteFSUTX - Free Report) and Fidelity Select Construction and Housing Portfolio (FSHOX Quick QuoteFSHOX - Free Report) should be good choices since they provide low-cost and uncomplicated equity funds that can help investors meet their goals.

These funds have wide exposure in industries like finance, industrial cyclical, utilities, technology and energy. These have not only preserved investors’ wealth but also generated excellent returns.

Why Invest in Fidelity Mutual Funds?

Fidelity mutual funds would be a compelling choice for investors. This is because Fidelity mutual funds have given positive returns in the past and are expected to perform well in the long run.

Headquartered in Boston, MA, Fidelity Investment is one of the oldest and most trusted mutual fund companies in the world. The company was founded in 1946 and had 51.5 million individual investors and $14.1 trillion of assets under administration as of June 30, 2024.

Fidelity Investment company has more than 7,5000 associates in 11 countries acrossNorth America, Europe, Asia and Australia to carry out extensive and in-depth research and provide potential investment avenues worldwide to their clients.

The company provides best-in-the-class financial planning, advisory services, retirement planning wealth management, brokerage services and college services to its clients. Thus, investors who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds can choose Fidelity mutual funds. Fidelity Investment sells its mutual fund products directly to its clients, which results in a zero-load charge.

We have thus selected five Fidelity mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, and minimum initial investments within $5000. The funds carry an expense ratio of less than 1%. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Fidelity Advisor Semiconductors fund invests most of its net assets in common stocks of domestic and foreign companies that areprincipally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FIKGX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.

Adam Benjamin has been the lead manager of FIKGX since March 15, 2020. Most of the fund’s holdings were in companies like NVIDIA (25.8%), On Semiconductor (7.3%) and Taiwan Semiconductor Manufacturing (6.1%) as of July 31, 2024.

As of Sept. 30, 2024, FIKGX’s three-year and five-year annualized returns are 26.7% and 34.2%, respectively. FIKGX has an annual expense ratio of 0.61%.

To see how this fund performed compared to its category and other 1, 2, and 3 Ranked Mutual Funds, please click here.

Fidelity Advisor Energy fund invests most of its net assets in common stocks of domestic and foreign companies that are principally engaged in the energy sectors like the conventional areas of oil, gas, electricity and coal, and newer sources of energy such as nuclear, geothermal, oil shale and solar power. FIKAX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.

Maurice FitzMaurice has been the lead manager of FIKAX since Dec. 31, 2019. Most of the fund’s holdings was in companies like Exxon Mobil (24.8%), Cenovus Energy (6.1%) and Schlumberger (5.3%) as of July 31, 2024.

As of Sept. 30, 2024, FIKAX’s three-year and five-year annualized returns are 23.1% and 14.5%, respectively. FIKAX has an annual expense ratio of 0.60%.

Fidelity Select Insurance Portfolio fund invests most of its net assets in common stocks of domestic and foreign companies that areengaged in underwriting, reinsuring, selling, distributing, or placing property and casualty, life, or health insurance. FSPCX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.

Fahim Razzaque has been the lead manager of FSPCX since July 13, 2022. Most of the fund’s exposure is in companies like Marsh & Mclennan (11.1%), Chubb (10.7%) and Arthur J.Gallagher (9%) as of May 31, 2024.

As of Sept. 30, 2024, FSPCX’s three-year and five-year annualized returns of 19.0% and 15.9%, respectively. FSPCX has an annual expense ratio of 0.79%.

Fidelity Select Utilities Portfolio fund invests most of its net assets in common stocks of foreign and domestic issues that are primarily engaged in the utility industry or companies deriving a majority of their revenues from utility operations. FSUTX advisors choose to invest in stocks based on fundamental analysis factors like financial condition, industry position, as well as market and economic conditions.

Douglas Simmons has been the lead manager of FSUTX since Oct. 1, 2006. Most of the fund’s exposure is in companies like Nextera Energy (15.6%), Sempra (7.1%) and Constellation Energy (6.9%) as of May 31, 2024.

As of Sept. 30, 2024, FSUTX’s three-year and five-year annualized returns are 16.3% and 10.4%, respectively. FSUTX has an annual expense ratio of 0.73%.

Fidelity Select Construction and Housing Portfolio fund invests most of its net assets in securities of domestic and foreign companies that are engaged in the design and construction of residential, commercial, industrial, and public works facilities, as well as companies engaged in the manufacture, supply, distribution, or sale of construction and housing products or services. FSHOX advisors choose to invest in stocks based on fundamental analysis such as financial condition, industry position, as well as market and economic conditions.

Jordan Michaels has been the lead manager of FSHOX since Sept. 7, 2021. Most of the fund’s exposure is in companies like Home Depot (17.1%), Lowe’s Companies (12.7%) and Johson Controls International (5%) as of May 31, 2024.

As of Sept. 30, 2024, FSHOX’s three-year and five-year annualized returns are almost 15.6% and 20.6%, respectively. FSHOX has an annual expense ratio of 0.76%.

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