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3 Solid Mutual Funds to Buy as Retail Sales Continue to Grow
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The retail industry had a difficult 2023 and the challenges continued in the first half of 2024, till it started staging a rebound as the Federal Reserve initiated its interest rate cuts. Sales have since been growing steadily and the final months of 2024 proved to be impressive for the retail sector, thanks to robust consumer spending during the holiday season.
Given this situation, it would be ideal to invest in retail and discretionary funds like Fidelity Select Leisure Portfolio (FDLSX - Free Report) , Fidelity Select Retailing Portfolio (FSRPX - Free Report) and Fidelity Select Consumer Staples Portfolio (FDFAX - Free Report) .
Retail Sales Show Strong Growth
Retail sales totaled $994.1 billion in December, jumping 0.4% after an upwardly revised 0.8% growth in November, the Commerce Department reported last week. On an annual basis, December's retail sales grew by an impressive 3.9%.
In the third quarter of 2024, retail sales rose 3.7% on a year-over-year basis. December saw a 0.7% sales increase at auto dealerships following a 3.1% rise in November. Furniture stores and clothing outlets recorded sales growth of 2.3% and 1.5%, respectively, while sporting goods, hobby, musical instruments, and bookstores experienced a 2.6% increase.
The retail sector faced challenges due to high inflation after the Federal Reserve implemented aggressive rate hikes to curb rising prices. However, inflation eased significantly in 2024, prompting the Fed to reduce interest rates by 100 basis points since September. This has lowered borrowing costs and price pressures, providing a much-needed boost to retail sales in the year's final months.
Additionally, holiday shopping contributed to a surge in consumer spending, further driving retail sales in November and December. Consumer spending, a key driver of retail performance, is estimated to have risen 3.3% year over year in the fourth quarter, following a 3.7% increase in the third quarter of 2024.
3 Best Choices
As a result, we've chosen three funds from the retail and discretionary sectors that are worth buying. These funds have given impressive 5-year and 10-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Leisure Portfolio 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 Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FDLSX has returned nearly 13.8% and 12.5% over the past five and 10-year periods, respectively. FDLSX has a Zacks Mutual Fund Rank #2 and its annual expense ratio is 0.69%, lower than the category average of 0.99%.
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 stocks 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 13.5% and 14.5% over the past five and 10-year periods, respectively. Fidelity Select Retailing Portfolio fund has a Zacks Mutual Fund Rank #1 and its annual expense ratio is 0.64%, which is lower than the category average of 0.99%.
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 distributing 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 6.7% and 6.1% over the past five and 10-year periods, respectively. FDFAX has a Zacks Mutual Fund Rank #2, and its annual expense ratio is 0.68%, lower than the category average of 0.94%.
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 Mutual Funds to Buy as Retail Sales Continue to Grow
The retail industry had a difficult 2023 and the challenges continued in the first half of 2024, till it started staging a rebound as the Federal Reserve initiated its interest rate cuts. Sales have since been growing steadily and the final months of 2024 proved to be impressive for the retail sector, thanks to robust consumer spending during the holiday season.
Given this situation, it would be ideal to invest in retail and discretionary funds like Fidelity Select Leisure Portfolio (FDLSX - Free Report) , Fidelity Select Retailing Portfolio (FSRPX - Free Report) and Fidelity Select Consumer Staples Portfolio (FDFAX - Free Report) .
Retail Sales Show Strong Growth
Retail sales totaled $994.1 billion in December, jumping 0.4% after an upwardly revised 0.8% growth in November, the Commerce Department reported last week. On an annual basis, December's retail sales grew by an impressive 3.9%.
In the third quarter of 2024, retail sales rose 3.7% on a year-over-year basis. December saw a 0.7% sales increase at auto dealerships following a 3.1% rise in November. Furniture stores and clothing outlets recorded sales growth of 2.3% and 1.5%, respectively, while sporting goods, hobby, musical instruments, and bookstores experienced a 2.6% increase.
The retail sector faced challenges due to high inflation after the Federal Reserve implemented aggressive rate hikes to curb rising prices. However, inflation eased significantly in 2024, prompting the Fed to reduce interest rates by 100 basis points since September. This has lowered borrowing costs and price pressures, providing a much-needed boost to retail sales in the year's final months.
Additionally, holiday shopping contributed to a surge in consumer spending, further driving retail sales in November and December. Consumer spending, a key driver of retail performance, is estimated to have risen 3.3% year over year in the fourth quarter, following a 3.7% increase in the third quarter of 2024.
3 Best Choices
As a result, we've chosen three funds from the retail and discretionary sectors that are worth buying. These funds have given impressive 5-year and 10-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Leisure Portfolio 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 Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FDLSX has returned nearly 13.8% and 12.5% over the past five and 10-year periods, respectively. FDLSX has a Zacks Mutual Fund Rank #2 and its annual expense ratio is 0.69%, lower than the category average of 0.99%.
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 stocks 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 13.5% and 14.5% over the past five and 10-year periods, respectively. Fidelity Select Retailing Portfolio fund has a Zacks Mutual Fund Rank #1 and its annual expense ratio is 0.64%, which is lower than the category average of 0.99%.
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 distributing 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 6.7% and 6.1% over the past five and 10-year periods, respectively. FDFAX has a Zacks Mutual Fund Rank #2, and its annual expense ratio is 0.68%, lower than the category average of 0.94%.
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 >>