Fidelity Investments, the third biggest fund family of the U.S. in terms of asset under management, is expected to get more love from investors in 2017. Fidelity offers a variety of investment options from sector-based funds to key actively managed funds. Following Donald Trump’s victory in the U.S. Presidential election, markets moved upward. With the Trump-led rally expected to gather more steam next year, sector and index funds are likely to gain further.
Moreover, Fidelity has decided to remove trading or redemption fees for 75 funds as demand for exchange-traded funds has increased in recent times. On this matter, spokeswoman Sophie Launay said that Fidelity is “comfortable removing redemption fees on those funds because of the nature of their investment universes.”
Additionally, Fidelity 500 Index Investor Fund FUSEX is now an index fund with net assets of $105.86 billion. This fund generally monitors the performance of the S&P 500 and invests the bulk of its assets in equity securities of companies from the benchmark index.
What Boosted Fidelity Fund’s Performance?
Fidelity invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investment is made in the technology sector. In the cyclical sectors, the fund family invests the maximum in the financial sector, which is expected to move up on the back of Trump’s financial regulations and a higher-rate environment.
Technology Select Sector SPDR (XLK) climbed 2.6% in the last three-year period. Also, the technology mutual fund posted a three-month positive return of 0.5%, according to Morningstar.
Additionally, Financial Select Sector SPDR (XLF) jumped 21.9% in the last three-month period and was the biggest gainer among the S&P 500 sectors. Per Morningstar, the financial mutual fund posted a three-month positive return of 17.2%.
Buy These 5 Strong Fidelity Mutual Funds
Fidelity Investments is one of the largest and oldest mutual fund companies in the world. The company serves more than 25 million individual customers. As of June 30, 2016, Fidelity had total assets of $5.4 trillion with $2.1 trillion under management. Fidelity Investments carries out operations in the U.S. through 10 regional offices and over 180 Investor Centers. It also has presence in eight other countries of North America, Europe, Asia and Australia.
The company provides investment advice, discount brokerage services, retirement services, wealth management services, securities execution and clearance and life insurance products to its clients. At Fidelity, a large group of investment professionals carry out extensive and in-depth research on potential investment avenues worldwide.
We have selected five mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). 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.
These funds have encouraging year-to-date (YTD), one-year and three-year annualized returns and minimum initial investment is within $5000. Also, these funds have low expense ratios.
Fidelity Select Financial Services Portfolio FIDSX invests the majority of its assets in common stocks of companies involved in offering financial services to industry and consumers. FIDSX seeks appreciation of capital.
FIDSX has an annual expense ratio of 0.75%, lower than the category average of 1.59%. The fund has YTD, one-year and three-year annualized returns of 19.1%, 18.2% and 8.4%, respectively.
Fidelity Select Technology FSPTX seeks capital growth over the long run. FSPTX invests a lion’s share of its assets in common stocks of companies primarily involved in production, development and sale of products used for technological advancement. FSPTX invests in both U.S. and non-U.S. companies.
FSPTX has an annual expense ratio of 0.76%, lower than the category average of 1.48%. The fund has YTD, one-year and three-year annualized returns of 12.9%, 12.1% and 10.6%, respectively.
Fidelity Select Medical Delivery Portfolio FSHCX seeks appreciation of capital. FSHCX invests the bulk of its assets in companies that either own or are involved in operating hospital and nursing homes, and are related to the healthcare services sector. The fund focuses on acquiring common stocks of issuers all over the world.
FSHCX has an annual expense ratio of 0.77%, lower than the category average of 1.36%. The fund has YTD, one-year and three-year annualized returns of 2.9%, 2.4% and 11%, respectively.
Fidelity Select Defense & Aerospace Portfolio FSDAX invests a large portion of its assets in securities of companies principally engaged in the research, manufacture, or sale of products or services related to the defense or aerospace industries.
FSDAX has an annual expense ratio of 0.79%, lower than the category average of 1.30%. The fund has YTD, one-year and three-year annualized returns of 18.2%, 18% and 8.1%, respectively.
Fidelity Value FDVLX seeks capital growth over the long run. It invests in “value” stocks of both U.S. and non-U.S. companies. These stocks are suggested by Fidelity Management & Research Company [FMR] depending on factors such as assets and growth prospect. The fund focuses on acquiring common stocks of mid-cap firms, but may also invest in large and small cap companies.
FDVLX has an annual expense ratio of 0.78%, lower than the category average of 1.20%. The fund has YTD, one-year and three-year annualized returns of 16.2%, 15.5% and 6.9%, respectively.
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