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3 Mutual Funds to Tap October's Striking Job Additions
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New job creations across the United States’ private sector were quite astounding in October, as neither analysts nor investors anticipated such an impressive increase in positions across key sectors.
The remarkable new job additions revealed a good domestic economy, which remained strong despite the country’s slow expansion in the third quarter and a six-week-long strike at General Motors Company.
October’s job report clearly reveals the strength in the U.S. job market. Mutual fund investors could thus consider investing in some key sectors that added the highest number of jobs.
Private-Sector Job Additions Top Expectations
According to the Bureau of Labor Statistics, total nonfarm payroll employment in October rose by 128,000. New job additions were broad-based and took analysts by surprise, given that the General Motors’ strike impacted the U.S. auto-industry. After all, employees on strike are considered as unemployed in U.S. statistics.
In fact, the unemployment rate nudged up to 3.6% in October, although it remained the lowest in about 50 years.
Sectors That Added Most New Jobs
Taking a closer look at October’s jobs report, one can note that employment in food services and drinking places, professional and business services, healthcare, social assistance and financial services drove the month’s share of new job roles.
Food services and drinking places added maximum jobs in October (+48,000), followed by professional and business services, which added 22,000 new roles. Employment in social assistance increased by 20,000, with most of the new jobs added in individual and family services.
The financial services and healthcare sectors added a decent number of jobs last month of 16,000 and 15,000, respectively.
The manufacturing sector lost 36,000 jobs in October. In fact, employment in the auto sector declined by 42,000 owing to the General Motors strike. New job additions across sectors such as wholesale trade, retail trade, construction, mining, transportation and warehousing and information changed little in October.
Our Choices
We have, therefore, selected three mutual funds that invest in sectors that gained the highest number of jobs in October. 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).
Healthcare
Hartford Healthcare HLS Fund Class IA (HIAHX - Free Report) aims for long-term capital growth. The fund invests the majority of its assets in equity securities of companies in the healthcare sector. The fund may invest across 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 Mutual Fund Rank #1 and has an annual expense ratio of 0.89%, which is below the category average of 1.26%. It has returned 12.2% on a year-to-date basis. HIAHX has no minimum initial investment.
Restaurants
Fidelity Select Consumer Discretionary Portfolio (FSCPX - Free Report) aims for capital growth. The fund invests the majority of its assets in securities of companies that manufacture and distribute consumer discretionary products. This non-diversified fund primarily invests in common stocks of companies. McDonald's and Starbucks are among the fund’s top holdings.
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.
FSCPX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.78%, which is below the category average of 1.26%. It has returned 21% on a year-to-date basis. FSCPX has no minimum initial investment.
Financial Services
Fidelity Select Financial Services Portfolio (FIDSX - Free Report) aims for capital appreciation. The fund invests the majority of its assets in securities of companies that primarily offer financial services. The non-diversified fund mostly invests in common stocks and in in U.S. and non-U.S. issuers alike.
This Zacks sector – Finance 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.
FIDSX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.76%, which is below the category average of 1.41%. It has returned 22.3% on a year-to-date basis. FIDSX has no minimum initial investment.
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3 Mutual Funds to Tap October's Striking Job Additions
New job creations across the United States’ private sector were quite astounding in October, as neither analysts nor investors anticipated such an impressive increase in positions across key sectors.
The remarkable new job additions revealed a good domestic economy, which remained strong despite the country’s slow expansion in the third quarter and a six-week-long strike at General Motors Company.
October’s job report clearly reveals the strength in the U.S. job market. Mutual fund investors could thus consider investing in some key sectors that added the highest number of jobs.
Private-Sector Job Additions Top Expectations
According to the Bureau of Labor Statistics, total nonfarm payroll employment in October rose by 128,000. New job additions were broad-based and took analysts by surprise, given that the General Motors’ strike impacted the U.S. auto-industry. After all, employees on strike are considered as unemployed in U.S. statistics.
In fact, the unemployment rate nudged up to 3.6% in October, although it remained the lowest in about 50 years.
Sectors That Added Most New Jobs
Taking a closer look at October’s jobs report, one can note that employment in food services and drinking places, professional and business services, healthcare, social assistance and financial services drove the month’s share of new job roles.
Food services and drinking places added maximum jobs in October (+48,000), followed by professional and business services, which added 22,000 new roles. Employment in social assistance increased by 20,000, with most of the new jobs added in individual and family services.
The financial services and healthcare sectors added a decent number of jobs last month of 16,000 and 15,000, respectively.
The manufacturing sector lost 36,000 jobs in October. In fact, employment in the auto sector declined by 42,000 owing to the General Motors strike. New job additions across sectors such as wholesale trade, retail trade, construction, mining, transportation and warehousing and information changed little in October.
Our Choices
We have, therefore, selected three mutual funds that invest in sectors that gained the highest number of jobs in October. 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).
Healthcare
Hartford Healthcare HLS Fund Class IA (HIAHX - Free Report) aims for long-term capital growth. The fund invests the majority of its assets in equity securities of companies in the healthcare sector. The fund may invest across 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 Mutual Fund Rank #1 and has an annual expense ratio of 0.89%, which is below the category average of 1.26%. It has returned 12.2% on a year-to-date basis. HIAHX has no minimum initial investment.
Restaurants
Fidelity Select Consumer Discretionary Portfolio (FSCPX - Free Report) aims for capital growth. The fund invests the majority of its assets in securities of companies that manufacture and distribute consumer discretionary products. This non-diversified fund primarily invests in common stocks of companies. McDonald's and Starbucks are among the fund’s top holdings.
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.
FSCPX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.78%, which is below the category average of 1.26%. It has returned 21% on a year-to-date basis. FSCPX has no minimum initial investment.
Financial Services
Fidelity Select Financial Services Portfolio (FIDSX - Free Report) aims for capital appreciation. The fund invests the majority of its assets in securities of companies that primarily offer financial services. The non-diversified fund mostly invests in common stocks and in in U.S. and non-U.S. issuers alike.
This Zacks sector – Finance 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.
FIDSX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.76%, which is below the category average of 1.41%. It has returned 22.3% on a year-to-date basis. FIDSX has no minimum initial investment.
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 >>