The recent Department of Labor report on weekly jobless claims indicates positive trends in the job market, reflecting a healthy economy. In addition, the report highlights growth in real gross output, underscoring the resilience in various industry sectors. This favorable economic environment presents an opportune moment to explore investment options, such as consumer discretionary mutual funds, which capitalize on the potential of the consumer sector.

According to the Department of Labor, the number of weekly jobless claims increased by 12,000 to reach 248,000 for the week ended Jul 1. This figure surpasses the consensus estimate of 245,000. Furthermore, there has been a revision in the previous week's data, which now stands at 236,000 after being revised downward by 3,000. These changes indicate a positive.

Additionally, the Bureau of Economic Analysis unveils a 2.7% increase in real gross output during the first quarter. This metric serves as an indicator of an industry's sales or receipts. The growth can be attributed to a 0.4% uptick in private goods-producing industries, a 3.4% rise in private services-producing industries, and a 3.7% surge in the government sector. These findings shed light on the robustness and endurance of the consumer sector, presenting it as an enticing investment opportunity.

Thus, from an investment standpoint, we have selected two mutual funds having consumer discretionary stocks as their major holdings, which are also expected to hedge your portfolio against any economic downturn and provide attractive returns. Mutual funds, in general, reduce transaction costs and diversify the portfolio without commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

These mutual funds, by the way, boast a Zacks Mutual Fund Rank #1 (Strong Buy)or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio.

Fidelity Select Leisure & Entertainment (FDLSX Quick QuoteFDLSX - Free Report) aims to seek capital appreciation by investing most of its assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries.

Kevin Francfort has been the lead manager of FDLSX since Sep 7, 2022. Most of the fund's holdings were in companies like Mcdonald's(16.8%), Booking Holdings Inc (11.5%) and Hilton Worldwide Holdings (7.9%) as of Feb 28, 2023.

FDLSX's 3-year and 5-year returns are 17.3% and 10%, respectively. The annual expense ratio is 0.74% compared to the category average of 0.79%. FDLSX has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.

Fidelity Select Retailing Portfolio (FSRPX Quick QuoteFSRPX - Free Report) seeks capital appreciation by investing in common stocks of companies principally engaged in merchandising finished goods and services primarily to individual consumers.

Boris Shepov has been the lead manager of FSRPX since May 15, 2018. Most of the fund's holdings were in companies like Amazon (23.8%), Home Depot Inc.(11.6%) and Lowe's Companies Inc.(7.6%) as of Feb 28, 2023.

FSRPX's 3-year and 5-year returns are 6.1% and 8.6%, respectively. The annual expense ratio is 0.72% compared to the category average of 0.79%. FSRPX has a Zacks Mutual Fund Rank #2.
 

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