Since Dec. 17–18, the Federal Reserve has expressed concerns about inflation and economic growth under the new Trump administration. This released minutes from this Wednesday’s meeting reflected uncertainty about policies like aggressive tariffs and stricter immigration controls, which have a big economic impact.

Inflation Risks and Policy Challenges

The Fed officials noted that the inflation readings have been higher than what was initially anticipated, and changes in trade and immigration policy might extend the period within which the rate of inflation could potentially be reduced by 0.25% to 4.25–4.50%.

A "Wait-and-See" Approach

Fed officials stated that the rate cuts for 2025 would be based on the inflation data that would indicate achievement of the 2% target. Market expectations remain cautious with investors targeting the next rate cut in May and only a 50% chance of a second cut in 2025.

Why invest in Consumer Staples Mutual Funds

Policy uncertainty and inflation concerns may make consumer staples mutual funds a sensible investment choice. This sector is steady and resilient in the volatile market, no matter the economic environment, because people will always need food, beverages and household products. 

We have chosen three consumer staples mutual funds, Fidelity Advisor Consumer Staples (FDIGX Quick QuoteFDIGX - Free Report) , Fidelity Select Consumer Staples Port (FDFAX Quick QuoteFDFAX - Free Report) and Fidelity Advisor Consumer Staples (FDAGX Quick QuoteFDAGX - Free Report) that investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.

Fidelity Advisor Consumer Staples fund invests its assets in securities of local and international issuers that are engaged in the production, sale, or distribution of consumer staples. FDIGX uses fundamental analysis for investment decisions, considering market and economic factors.

Ben Shuleva has been the lead manager of FDIGX since Jan. 1, 2020. Most of the fund’s holdings were in companies like The Coca-Cola Co (14.2%), The Procter & Gamble Co (14.2%) and Keurig Dr Pepper Inc. (9.8%) as of Aug. 31, 2024.

FDIGX’s 3-year and 5-year annualized returns are 8% and 8.2%, respectively. Its net expense ratio is 0.71%. FDIGX 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 Port 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.

Ben Shuleva has been one of the lead managers of FDFAX since Jan. 1, 2020. Most of the fund's holdings were in companies like The Coca-Cola Co (14.2%), The Procter & Gamble Co (14.2%) and Keurig Dr Pepper Inc. (9.8%) as of Aug. 31, 2024.

FDFAX’s 3-year and 5-year annualized returns are 8% and 8.2%, respectively, and its net expense ratio is 0.68%. FDFAX has a Zacks Mutual Fund Rank #2.

Fidelity Advisor Consumer Staples fund invests the majority of its assets in securities of companies that manufacture and market consumer staples products. FDAGX advisors also invest in domestic and foreign issuers.

Ben Shuleva has been the lead manager of FDAGX since Dec 31, 2019. Most of the fund’s holdings were in companies like The Coca-Cola Co (14.2%), The Procter & Gamble Co. (14.2%) and Keurig Dr Pepper Inc. (9.8%) as of Aug. 31, 2024.

FDAGX’s 3-year and 5-year returns are 7.7% and 7.9%, respectively. The annual expense ratio is 0.97%. FDAGX has a Zacks Mutual Rank #2.

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