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3 Mutual Funds to Buy on Impressive November Retail Sales

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A moderate increase in retail sales in November eased investor fears of an economic slowdown. With only the first half of the holiday season out of the way, consumer spending is likely to trend higher over the next few months. Therefore, it would be ideal to invest in a couple of consumer discretionary and retail mutual funds to benefit from the sales uptick.

November Retail Sales Data Lifts Hope

Sales of U.S. retail and food services increased 0.2% to reach $513.5 billion in November from the month before, per a U.S. Commerce Department report. Retail sales were up 4.2% in November from the same period last year.

Economists believe strong consumer spending is boosting fourth-quarter GDP growth up to 3%. Online sales surpassed brick-and-mortar purchases in November, increasing 2.3%.Sales of electronic products and furniture increased 1.4% and 1.2%, respectively. Health and personal care items, food and beverages and general merchandise products’ sales rose too.

Gas station sales went south in November, dropping by 2.3% owing to the 40-cent per gallon drop in gasoline prices since October. This could have a positive effect on further retail sales as consumers will have more cash at disposal.

What Propelled November Retail Sales?

Black Friday and other shopping-related events have helped retail sales advance this holiday season. In addition, consumer spending, which accounts for about 70% of the U.S. economy, rose at an annualized rate of 3.6% in the third quarter.

The rise in November retail sales is indicative of the upward movement of consumer spending, which diminished fears of a considerable slowdown in the economy. A healthy labor market and record-low unemployment rate are some of the factors behind strong consumer confidence that helped boost consumer spending.

3 Mutual Funds to Buy

Given the uptick in retail sales, we have selected two funds that can make the most of this encouraging trend.

We have selected funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment doesn’t exceed $5,000.

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 Consumer Discretionary (FSCPX - Free Report) invests 80% of its assets in securities of companies that manufacture and distribute consumer discretionary goods and services. The fund invests in both domestic and foreign stocks.

This Sector - Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 10.2% over the three-year and 10.5% over the five-year benchmarks. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here

The Fidelity Select Consumer Discretionary fund, managed by Fidelity, has a Zacks Mutual Fund Rank #1 and carries an expense ratio of 0.77%.  Moreover, FSCPXrequires a minimal initial investment of $2,500.

FSCPX’s performance, as of the last filing, when compared to funds in its category was in the top 11% over the past three years and in the 7% over the past five years.

Fidelity Select Leisure Fund (FDLSX - Free Report) seeks capital appreciation by investing at least 80% of its assets in companies that design, produce or distribute goods or services in the leisure industries. The fund invests in both domestic and foreign stocks.

This Sector - Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 11.2% over the three-year and 9.8% over the five-year benchmarks. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here

The Fidelity Select Leisure Fund, managed by Fidelity, has a Zacks Mutual Fund Rank #1 and carries an expense ratio of 0.77%. Moreover, FDLSX requires a minimal initial investment of $2,500.

FDLSX’s performance, as of the last filing, when compared to funds in its category was in the top 8% over the past three years and in the 8% over the past five years.

Fidelity Select Retailing (FSRPX - Free Report) invests 80% of its assets in securities of companies that merchandise finished goods and services to individual customers. The fund invests in both U.S. and non-U.S. stocks.

This Sector - Other product has a history of positive total returns for over 10 years. Specifically, the fund has returned 13.5% over the three-year and 14.8% over the five-year benchmarks. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here

The Fidelity Select Retailingfund, managed by Fidelity, has a Zacks Mutual Fund Rank #2 and carries an expense ratio of 0.77%.  Moreover, FSRPXrequires a minimal initial investment of $2,500.

FSRPX’s performance, as of the last filing, when compared to funds in its category was in the top 7% over the past three years and in the 1% over the past five years.

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