3 Fidelity Mutual Funds to Buy for Long-Term Gains
Zacks Equity Research
5 min read
Fidelity Investments is one of the largest and oldest mutual fund companies in the world since its inception in 1946. Headquartered inBoston, MA, Fidelity Investments currentlyhas more than 43 million individual investors. The company presently employs more than 70,000 associates in nine countries across North America, Europe, Asia and Australia to carry out extensive and in-depth research to provide potential investment avenues worldwide for their clients. As of Jun 30, 2023, Fidelity Investments held $11.7 trillion in assets under administration.
The company offers a large family of mutual funds with an expert fund management team in various asset classes to choose from based on individual risk appetite. It also seeks to provide investment advice, discount brokerage services, retirement services and wealth management services, among others, to its clients. The company sells its mutual fund products directly to its clients, which results in zero load charges.
Fidelity mutual funds are compelling investment choices since they have given a positive return and are expected to perform well in the long run. We have thus selected three fidelity mutual funds that have wide exposure to categories like energy, technology and large-cap which have not only preserved investors’ wealth but also generated an excellent return amid volatile market conditions.
The oil sector is expected to give a balanced return in the near future. Backed by strong economic growth and demand, the price of Brent crude topped 98$/barrel in September 2023. OPEC and its allies may announce further supply cuts amid rising tensions in the Middle East due to the war between Israel and the Palestine-based militant group Hamas. The technology sector will also benefit from the adoption and evolution of artificial intelligence and machine learning, which are expected to change the face of many industries in the coming years, thereby increasing profitability.
The CPI for the month of October remains unchanged from the previous month at 0.4% on a seasonally adjusted basis. As inflation began to stabilize, investors started expecting an end to the monetary tightening campaign in the near future or a stable interest rate if the Federal Reserve keeps the current interest rate higher for longer to meet its 2% inflation. Such moves will be added positives for the industry in the long run.
These funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive YTD, three-year and five-year annualized returns, and minimum initial investments within $5000, and carry a low expense ratio compared to the category average. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Energy FSENX fund invests most of its net assets in common stocks of domestic and foreign companies that are principally engaged in the energy field, including the conventional areas of oil, gas, electricity, and coal, and newer sources of energy such as nuclear, geo-thermal, oil shale, and solar power. FSENX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.
Maurice FitzMaurice has been the lead manager of FSENX since Dec 31, 2019. Most of the fund’s exposure is in companies like Exxon Mobil (24.7%), Chevron (6.1%) and Schlumberger (4.7%) as of 8/31/2023.
FSENX’s three-year and five-year annualized returns are almost 52.7% and 9.9%, respectively. FSENX has an annual expense ratio of 0.73%, which is less than the category average of 1.07%.
To see how this fund performed compared to its category and other 1, 2, and 3 Ranked Mutual Funds, please click here.
Fidelity Select Semiconductors Portfolio FSELX fund invests most of its net assets in common stocks of domestic and foreign companies that are principally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.
Adam Benjamin has been the lead manager of FSELX since Mar 15, 2020. Most of the fund’s exposure is in companies like NVIDIA (24.8%), NXP Semiconductors (8.4%) and ON Semiconductor (8.0%) as of 8/31/2023.
FSELX’s three-year and five-year annualized returns are almost 21.8% and 27.2%, respectively. FSELX has an annual expense ratio of 0.69%, which is less than the category average of 1.05%.
Fidelity Large Cap Stock FCLKX invests most of its net assets in common stocks of large market capitalization companies with market capitalization similar to the companies listed on the Russell 1000 Index or the S&P 500 Index. FCLKX advisors generally invest in issues of both domestic and foreign companies.
Matthew W. Fruhan has been the lead manager of FCLKX since May 24, 2017, and most of the fund’s exposure is in companies like Microsoft (6.7%), Exxon Mobil (6.6%) and General Electric (6.2%) as of 7/31/2023.
FCLKX three-year and five-year annualized returns are 16.8% and 10.8%, respectively. FCLKX has an annual expense ratio of 0.45% compared to the category average of 0.84%.
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