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3 Funds to Benefit From Robust Holiday Sales

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A robust labor market, steadily rising wages and strong household finances have resulted in a surge in household spending across the United States. Further, holiday retail sales have been the strongest in the last six years.

By the way, U.S. retail sales had already gathered steam in November. Under such encouraging conditions, it makes buying mutual funds that invest in leisure, discretionary and transportation companies prudent.

U.S. Holiday Retail Sales Strongest in 6 Years

Holiday retail sales grew at it fastest pace in the last six years, according to an early data. Excluding automobiles, the metric jumped 5.1% between Nov 1 and Dec 24 compared with the year-ago period, per Mastercard SpendingPulse. The report also stated that U.S. e-commerce sales grew 18.1% from Nov 1 through Dec 19 on a year-over-year basis.

Further, Mastercard SpendingPulse stated that shoppers have spent more than $850 billion this holiday season. Such spending was driven primarily by steadily increasing online sales. Online sales grew 26.4% from a year earlier between the Wednesday before Thanksgiving through Black Friday, per Adobe Analytics.

Meanwhile, 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%.

3 Best Funds to Buy Now

Given such circumstances, we have highlighted three mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to gain from such 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 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, FSCPX requires a minimal initial investment of $2,500.

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.

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 Retailing fund, managed by Fidelity, has a Zacks Mutual Fund Rank #2 and carries an expense ratio of 0.77%.  Moreover, FSRPX requires a minimal initial investment of $2,500.

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