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September’s new job additions were pretty decent as various sectors witnessed creation of new positions. This is good news, given the ongoing U.S.-China trade tensions and investor concerns over a global growth slowdown.
New jobs were added in sectors such as healthcare. The government job sector, which isn’t known for striking new job additions, surprised in September. Mutual fund investors, who seek to take advantage of sectoral job gains last month, could consider investing in related funds.
US Economy Nears Full Employment
According to the latest report by the Bureau of Labor Statistics, total non-farm payroll increased by 136,000 in September. In fact, as the labor market continues to get tighter, more companies could struggle to find skilled workers ahead. However, the report indicated toward a healthy U.S. economy.
Unemployment Hits 50-Year Low
Unemployment rate in the United States dropped to a five-decade low of 3.5% in September, on par with December 1969 level. The real unemployment rate, U6, which comprises discouraged workers and underemployed, was 6.9%. U6 was on par with its lowest in almost 19 years.
The labor force participation rate was 63.2%.
Sectors That Added Most Jobs
Healthcare added as many as 39,000 new jobs, the highest, with ample gains in Ambulatory health care services (+29,000) and hospitals (+8,000).Next in line was the professional and business services industry, with 34,000 newly opened positions.
Government jobs increased as well, as the numbers hit 22,000 in September. Apart from healthcare and professional and business services, leisure and hospitality, technology and construction were some of the sectors that added a decent number of new jobs last month. Leisure and hospitality added 21,000 new jobs, information added 9,000 and construction added 7,000.
Our Choices
We have, therefore, selected four mutual funds that invest in the aforementioned sectors. All these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy). Moreover, these funds have encouraging year-to-date returns. Additionally, the minimum initial investment is within $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).
BlackRock Technology Opportunities Fund Investor A Shares (BGSAX - Free Report) seeks capital growth over the long term. The fund invests the majority of its assets in equity securities of technology companies. These are chosen on the basis of their potential for growth from advancement and development in technology. The fund may invest in U.S. and non-U.S. companies alike. BGSAX mostly invests in common stocks but may also invest in preferred stock and convertible securities.
This Zacks sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
BGSAX carries a Zacks Rank #1 and has an annual expense ratio of 1.18%, which is below the category average of 1.28%. It has returned 26.6% on a year-to-date basis. BGSAX has a minimum initial investment of $1000.
Fidelity Select Leisure Portfolio (FDLSX - Free Report) aims for capital growth. The fund primarily invests the majority of its assets in securities of companies engaged in activities in the leisure industry. These activities may include designing, producing and marketing of products and/or services in the said industry. The fund mostly invests in common stocks.
This Zacks sector – Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FDLSX carries a Zacks Rank #1 and has an annual expense ratio of 0.76%, which is below the category average of 1.23%. It has returned 23.5% on a year-to-date basis. FDLSX has no minimum initial investment.
Davis Real Estate Fund Class A (RPFRX - Free Report) seeks total return by combining income and growth. The fund invests the majority of its assets in the securities of companies engaged in activities in the real estate industry. The fund mostly invests in common stocks of companies and may also invest in non-U.S. companies.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
RPFRX carries a Zacks Rank #1 and has an annual expense ratio of 0.97%, which is below the category average of 1.20%. It has returned 26.4% on a year-to-date basis. RPFRX has a minimum initial investment of $1000.
Hartford Healthcare HLS Fund Class IA (HIAHX - Free Report) aims for long-term capital appreciation. The fund invests the majority of its assets in securities of companies engaged in activities in the healthcare industry. The fund invests in U.S. and foreign companies alike and may invest in companies of all market capitalizations.
This Zacks sector – Health product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
HIAHX carries a Zacks Rank #2 and has an annual expense ratio of 0.89%, which is below the category average of 1.22%. It has returned 12.2% on a year-to-date basis. HIAHX has no minimum initial investment.
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4 Funds to Gain From September's Jobs Report
September’s new job additions were pretty decent as various sectors witnessed creation of new positions. This is good news, given the ongoing U.S.-China trade tensions and investor concerns over a global growth slowdown.
New jobs were added in sectors such as healthcare. The government job sector, which isn’t known for striking new job additions, surprised in September. Mutual fund investors, who seek to take advantage of sectoral job gains last month, could consider investing in related funds.
US Economy Nears Full Employment
According to the latest report by the Bureau of Labor Statistics, total non-farm payroll increased by 136,000 in September. In fact, as the labor market continues to get tighter, more companies could struggle to find skilled workers ahead. However, the report indicated toward a healthy U.S. economy.
Unemployment Hits 50-Year Low
Unemployment rate in the United States dropped to a five-decade low of 3.5% in September, on par with December 1969 level. The real unemployment rate, U6, which comprises discouraged workers and underemployed, was 6.9%. U6 was on par with its lowest in almost 19 years.
The labor force participation rate was 63.2%.
Sectors That Added Most Jobs
Healthcare added as many as 39,000 new jobs, the highest, with ample gains in Ambulatory health care services (+29,000) and hospitals (+8,000).Next in line was the professional and business services industry, with 34,000 newly opened positions.
Government jobs increased as well, as the numbers hit 22,000 in September. Apart from healthcare and professional and business services, leisure and hospitality, technology and construction were some of the sectors that added a decent number of new jobs last month. Leisure and hospitality added 21,000 new jobs, information added 9,000 and construction added 7,000.
Our Choices
We have, therefore, selected four mutual funds that invest in the aforementioned sectors. All these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy). Moreover, these funds have encouraging year-to-date returns. Additionally, the minimum initial investment is within $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).
BlackRock Technology Opportunities Fund Investor A Shares (BGSAX - Free Report) seeks capital growth over the long term. The fund invests the majority of its assets in equity securities of technology companies. These are chosen on the basis of their potential for growth from advancement and development in technology. The fund may invest in U.S. and non-U.S. companies alike. BGSAX mostly invests in common stocks but may also invest in preferred stock and convertible securities.
This Zacks sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
BGSAX carries a Zacks Rank #1 and has an annual expense ratio of 1.18%, which is below the category average of 1.28%. It has returned 26.6% on a year-to-date basis. BGSAX has a minimum initial investment of $1000.
Fidelity Select Leisure Portfolio (FDLSX - Free Report) aims for capital growth. The fund primarily invests the majority of its assets in securities of companies engaged in activities in the leisure industry. These activities may include designing, producing and marketing of products and/or services in the said industry. The fund mostly invests in common stocks.
This Zacks sector – Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FDLSX carries a Zacks Rank #1 and has an annual expense ratio of 0.76%, which is below the category average of 1.23%. It has returned 23.5% on a year-to-date basis. FDLSX has no minimum initial investment.
Davis Real Estate Fund Class A (RPFRX - Free Report) seeks total return by combining income and growth. The fund invests the majority of its assets in the securities of companies engaged in activities in the real estate industry. The fund mostly invests in common stocks of companies and may also invest in non-U.S. companies.
This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
RPFRX carries a Zacks Rank #1 and has an annual expense ratio of 0.97%, which is below the category average of 1.20%. It has returned 26.4% on a year-to-date basis. RPFRX has a minimum initial investment of $1000.
Hartford Healthcare HLS Fund Class IA (HIAHX - Free Report) aims for long-term capital appreciation. The fund invests the majority of its assets in securities of companies engaged in activities in the healthcare industry. The fund invests in U.S. and foreign companies alike and may invest in companies of all market capitalizations.
This Zacks sector – Health product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
HIAHX carries a Zacks Rank #2 and has an annual expense ratio of 0.89%, which is below the category average of 1.22%. It has returned 12.2% on a year-to-date basis. HIAHX has no minimum initial investment.
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