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The new U.S.-Mexico-Canada Agreement (USMCA), finally approved by the House of Representatives on Dec 19, is expected to fetch concrete benefits to the United States. The bill is now on its way to the Senate, although it remains unclear when the chamber might vote. Nonetheless, mutual fund investors could take a look at the funds that are expected to gain immensely should the Senate vote in President Donald Trump's favor.
Details of New Trade Deal With Canada, Mexico
The House of Representatives voted (385 to 41) to pass the USMCA between the United States, Canada and Mexico that replaces the North American Free Trade Agreement (NAFTA), 25 years after it was signed by the three countries. Canada and Mexico are the United States’ two largest trading partners.
The new treaty not only won the approval of the Democrats and Republicans but also that of the Chamber of Commerce and the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).
A major reason behind this unity is because the bill holds immense opportunity for American farmers, manufacturers, workers and consumers. The bill promises to open new markets for U.S.-manufactured products and proposes to decrease the cost of essential products such as household staples (groceries, dairy products and pharmaceutical products etc). Canadian markets will be more open to American dairy and poultry under the bill.
In addition, it would protect crucial American industries such as the auto and steel, from what the Trump administration considered unfair competition. Commerce Secretary Wilbur Ross, speaking to Fox Business, said that the new trade agreement could create about 176,000 new vacancies and push $34 billion into the American auto industry.
The USMCA now needs to get the Senate’s approval to come alive. Given that Trump wanted a vote before the year runs out, chances are that the bill might be approved in the near future. To make the most of this likely new trade deal, mutual fund investors could consider investing in funds that have a strong foothold in consumer staples and manufacturing/industrial products.
Our Choices
We have, therefore, selected three mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and invest in consumer staples and industrial products. These funds have also provided handsome returns to investors on a year-to-date basis. In addition, the minimum initial investment is within $5,000.
We expect these funds to outperform 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 Advisor Consumer Staples Fund Class A (FDAGX - Free Report) aims for capital growth. The fund invests the majority of its assets in securities of companies mostly engaged in the manufacture, marketing or distribution of consumer staples. The non-diversified fund invests primarily in common stocks and may invest in U.S. and non-U.S. companies alike.
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.
FDAGX carries a Zacks Rank #1 and has an annual expense ratio of 1.05%, which is below the category average of 1.20%. It has returned 28.3% on a year-to-date basis. FDAGX has no minimum initial investment.
Fidelity Select Consumer Staples Portfolio (FDFAX - Free Report) seeks capital appreciation. The non-diversified fund invests the majority of its assets in securities of companies that manufacture, sell or distribute consumer staples products. FDFAX mostly invests in common stocks of these companies. The fund may invest in securities of both American and foreign companies alike.
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.
FDFAX carries a Zacks Rank #1 and has an annual expense ratio of 0.77%, which is below the category average of 1.20%. It has returned 28.6% on a year-to-date basis. FDFAX has no minimum initial investment.
Fidelity Select Industrials Portfolio (FCYIX - Free Report) aims for capital growth. The fund invests the majority of its assets in companies that manufacture, supply or sell industrial products, services or equipment. The non-diversified fund invests mostly in common stocks and may invest in U.S. and non-U.S. companies alike.
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.
FCYIX carries a Zacks Rank #2 and has an annual expense ratio of 0.76%, which is below the category average of 1.10%. It has returned 27.1% on a year-to-date basis. FCYIX has no minimum initial investment.
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USMCA Trade Deal to Boost These 3 Mutual Funds
The new U.S.-Mexico-Canada Agreement (USMCA), finally approved by the House of Representatives on Dec 19, is expected to fetch concrete benefits to the United States. The bill is now on its way to the Senate, although it remains unclear when the chamber might vote. Nonetheless, mutual fund investors could take a look at the funds that are expected to gain immensely should the Senate vote in President Donald Trump's favor.
Details of New Trade Deal With Canada, Mexico
The House of Representatives voted (385 to 41) to pass the USMCA between the United States, Canada and Mexico that replaces the North American Free Trade Agreement (NAFTA), 25 years after it was signed by the three countries. Canada and Mexico are the United States’ two largest trading partners.
The new treaty not only won the approval of the Democrats and Republicans but also that of the Chamber of Commerce and the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).
A major reason behind this unity is because the bill holds immense opportunity for American farmers, manufacturers, workers and consumers. The bill promises to open new markets for U.S.-manufactured products and proposes to decrease the cost of essential products such as household staples (groceries, dairy products and pharmaceutical products etc). Canadian markets will be more open to American dairy and poultry under the bill.
In addition, it would protect crucial American industries such as the auto and steel, from what the Trump administration considered unfair competition. Commerce Secretary Wilbur Ross, speaking to Fox Business, said that the new trade agreement could create about 176,000 new vacancies and push $34 billion into the American auto industry.
The USMCA now needs to get the Senate’s approval to come alive. Given that Trump wanted a vote before the year runs out, chances are that the bill might be approved in the near future. To make the most of this likely new trade deal, mutual fund investors could consider investing in funds that have a strong foothold in consumer staples and manufacturing/industrial products.
Our Choices
We have, therefore, selected three mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and invest in consumer staples and industrial products. These funds have also provided handsome returns to investors on a year-to-date basis. In addition, the minimum initial investment is within $5,000.
We expect these funds to outperform 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 Advisor Consumer Staples Fund Class A (FDAGX - Free Report) aims for capital growth. The fund invests the majority of its assets in securities of companies mostly engaged in the manufacture, marketing or distribution of consumer staples. The non-diversified fund invests primarily in common stocks and may invest in U.S. and non-U.S. companies alike.
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.
FDAGX carries a Zacks Rank #1 and has an annual expense ratio of 1.05%, which is below the category average of 1.20%. It has returned 28.3% on a year-to-date basis. FDAGX has no minimum initial investment.
Fidelity Select Consumer Staples Portfolio (FDFAX - Free Report) seeks capital appreciation. The non-diversified fund invests the majority of its assets in securities of companies that manufacture, sell or distribute consumer staples products. FDFAX mostly invests in common stocks of these companies. The fund may invest in securities of both American and foreign companies alike.
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.
FDFAX carries a Zacks Rank #1 and has an annual expense ratio of 0.77%, which is below the category average of 1.20%. It has returned 28.6% on a year-to-date basis. FDFAX has no minimum initial investment.
Fidelity Select Industrials Portfolio (FCYIX - Free Report) aims for capital growth. The fund invests the majority of its assets in companies that manufacture, supply or sell industrial products, services or equipment. The non-diversified fund invests mostly in common stocks and may invest in U.S. and non-U.S. companies alike.
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.
FCYIX carries a Zacks Rank #2 and has an annual expense ratio of 0.76%, which is below the category average of 1.10%. It has returned 27.1% on a year-to-date basis. FCYIX has no minimum initial investment.
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