In its third rate cut this year, the Federal Reserve slashed the key interest rate by 25 basis points in December. In line with market expectations, the overnight borrowing rate was lowered to a target range of 4.25-4.5%, back to levels last seen in December 2022. However, the U.S.-China trade war and mixed economic data are concerns.
According to the reports released by the Department of Labor Statistics, the consumer price index (CPI) rose 0.3% in November, the highest in seven months after advancing 0.2% for four straight months. On a year-over-year basis, CPI rose 3.3% compared with the central bank's 2% target.
The producer price index (PPI) shot up 0.4% in November the largest gain since June. On a year-over-year basis, the PPI shot up 3.0% compared to a 2.6% rise in October. The increase was the biggest since February 2023. Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 242,000 for the week ended Dec. 7.
Despite the lack of progress in the fight to control inflation, investors are hopeful that the solid fundamentals of the U.S. economy will pave the way for a soft landing.
With a long-term perspective in mind, mutual fund investing can help those who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds. Fidelity mutual funds like Fidelity Select Energy FSENX, Fidelity Select Insurance Portfolio FSPCX, Fidelity New Millennium Fund FMILX and Fidelity Select Semiconductors Portfolio FSELX should be good choices since they provide low cost and uncomplicated equity funds that can help investors meet their goals.
These funds have wide exposure in industries like finance, industrial cyclical, utilities, technology and energy. These have not only preserved investors’ wealth but also generated excellent returns
Why Invest in Fidelity Mutual Funds?
Fidelity mutual funds would be a compelling choice for investors. This is because Fidelity mutual funds have given positive returns in the past and are expected to perform well in the long run.
Headquartered in Boston, MA, Fidelity Investment is one of the oldest and most trusted mutual fund companies in the world. The company was founded in 1946 and had 51.5 million individual investors and $15 trillion of assets under administration as of Sept. 30, 2024.
Fidelity Investment company has more than 7,6000 associates in 11 countries across North America, Europe, Asia and Australia to carry out extensive and in-depth research and provide potential investment avenues worldwide to their clients.
The company provides best-in-the-class financial planning, advisory services, retirement planning wealth management, brokerage services and college services to its clients. Thus, investors who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds can choose Fidelity mutual funds. Fidelity Investment sells its mutual fund products directly to its clients, which results in a zero-load charge.
We have thus selected four Fidelity mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, and minimum initial investments within $5000. The funds carry an expense ratio of less than 1%. 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 fund invests most of its net assets in common stocks of domestic and foreign companies that areprincipally engaged in the energy field, including the conventional areas of oil, gas, electricity, and coal, and newer sources of energy such as nuclear, geothermal, 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 Jan. 1, 2020. Most of the fund’s exposure was in companies like Exxon Mobil (24.8%), Cenovus Energy (5.9%) and Schlumberger (5.0%) as of Aug. 31, 2024.
FSENX’s three-year and five-year annualized returns are almost 24% and 16.1%, respectively. FSENX has an annual expense ratio of 0.66%.
To see how this fund performed compared to its category and other 1, 2, and 3 Ranked Mutual Funds, please click here.
Fidelity Select Insurance Portfolio fund invests most of its net assets in common stocks of domestic and foreign companies that areengaged in underwriting, reinsuring, selling, distributing, or placing property and casualty, life, or health insurance. FSPCX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.
Fahim Razzaque has been the lead manager of FSPCX since July 13, 2022. Most of the fund’s exposure is in companies like Chubb (9.8%), Marsh & Mclennan (9.7%), and Arthur J.Gallagher (9.2%) as of Aug. 31, 2024.
FSPCX’s three-year and five-year annualized returns of 21.7% and 17.2%, respectively. FSPCX has an annual expense ratio of 0.70%.
Fidelity New Millennium Fund invests most of its net assets in common stocks of small and medium-sized companies with either growth or value or sometimes both characteristics. FMILX advisors generally invest in companies that may benefit from long-term changes due to technological advances, product innovation, economic plans, demographics, social attitudes, and other factors.
Daniel Sherwood has been the lead manager of FMILX since Oct. 19, 2022. Most of the fund’s exposure is in companies like Microsoft (6.7%), NVIDIA (6.4%) and Apple (5.3%) as of Aug. 31, 2024.
FMILX has three-year and five-year annualized returns of 19.9% and 16.9%, respectively. FMILX has an annual expense ratio of 0.80%.
Fidelity Select Semiconductors Portfolio invests most of its net assets in common stocks of domestic and foreign companies that areprincipally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX chooses to invest in stocks based on fundamental analysis factors such as each issuer's financial condition and industry position, and market and economic conditions.
Adam Benjamin has been the lead manager of FSELX since March 15, 2020. Most of the fund’s exposure was to companies like NVIDIA (24.8%), Taiwan Semiconductors (7.7%) and ON Semiconductors (7.2%) as of Aug. 31, 2024.
FSELX’s three-year and five-year annualized returns are nearly 19.2% and 32.6%, respectively. FSELX has an annual expense ratio of 0.63%.
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