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3 Solid Funds to Buy as Fed Keeps Interest Rates Unchanged
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The Federal Reserve kept its benchmark policy rate unchanged in the current range of 5.25-5.5% on Nov 1 at its FOMC meeting. This is the third time in seven meetings this year that the central bank has kept interest rates unaltered.
This will definitely bring a sigh of relief to investors ahead of the all-important holiday season. Easing price pressures has also been helping the retail and consumer discretionary sector. Given this situation, investing in funds like Fidelity Select Consumer DiscretionaryPortfolio (FSCPX - Free Report) , Fidelity Select Retailing Portfolio (FSRPX - Free Report) and Fidelity Select Leisure Portfolio (FDLSX - Free Report) will be a wise decision.
Fed Keeps Interest Rates Unchanged
The Federal Reserve’s decision to keep its interest rates unchanged was widely expected, sending stocks on a rally. The Dow, S&P 500 and Nasdaq ended 0.7%, 1.1% and 1.6%, respectively, on Nov 1.
The jump came despite the Federal Reserve maintaining its hawkish stance and casting worry. Fed Chair Jerome Powell said that the officials are still in a dilemma as they are not sure whether the current fiscal situation is tight enough to tame inflation or whether more restraints are required.
Moreover, the Fed didn’t give a clear picture of its future course of action with interest rate hikes. Instead, Powell said that they are open to more interest rate hikes if the situation demands, but are at the same time worried that higher interest rates could affect the economy’s health.
The Fed has increased interest rates by 525 basis points since March 2022, which has led inflation to decline sharply over the past year. Yet, inflation is way above the Federal Reserve’s 2% target.
However, investors are confident that the Fed would end its interest rate hiking campaign after increasing rates by another 25 basis points this year.
A pause in interest rate hikes twice in the past three months has made market participants optimistic ahead of the holiday season. The holiday season is a key sales window for retailers, and a steady rise in retail sales over the past few months has made them hopeful about recording robust sales this year, too.
Retail sales totaled $704.9 billion in September, jumping 0.7% after a 0.8% rise in August. The September figures also surpassed the consensus estimate of a rise of 0.3%. Year over year, retail sales increased a solid 3.8% in September. Also, the U.S. economy grew a solid 4.9% in the third quarter, surpassing estimates of a rise of 4.7% and the fastest in almost two years.
3 Best Choices
We have selected three mutual funds with significant exposure to the retail and discretionary sectors. The funds carry either a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above factors. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors in identifying potential winners and losers. Unlike most fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also 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 Select Consumer Discretionary Portfolio fund invests the majority of its assets in common stocks of companies principally engaged in the manufacture or distribution of consumer discretionaries. FSCPX uses the fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions, for its decisions.
Fidelity Select Consumer Discretionary Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FSCPX has returned nearly 3% and 6.7% over the past three and five-year periods, respectively. Fidelity Select Consumer Discretionary Portfolio fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.76%, which is below the category average of 0.79%.
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 fund aims for capital appreciation. FSRPX invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.
Fidelity Select Retailing Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 2% and 6.8% over the past three and five-year periods, respectively. Fidelity Select Retailing Portfolio fund has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.72%, which is below the category average of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Leisure Portfolio fund invests the majority of its assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries. FDLSX uses fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions, for its decisions.
Fidelity Select Leisure & Entertainment fund has a history of positive total returns for more than 10 years. Specifically, FDLSX has returned nearly 12.2% and 10.1% over the past three and five-year periods, respectively. FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.74%, which is below the category average of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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3 Solid Funds to Buy as Fed Keeps Interest Rates Unchanged
The Federal Reserve kept its benchmark policy rate unchanged in the current range of 5.25-5.5% on Nov 1 at its FOMC meeting. This is the third time in seven meetings this year that the central bank has kept interest rates unaltered.
This will definitely bring a sigh of relief to investors ahead of the all-important holiday season. Easing price pressures has also been helping the retail and consumer discretionary sector. Given this situation, investing in funds like Fidelity Select Consumer Discretionary Portfolio (FSCPX - Free Report) , Fidelity Select Retailing Portfolio (FSRPX - Free Report) and Fidelity Select Leisure Portfolio (FDLSX - Free Report) will be a wise decision.
Fed Keeps Interest Rates Unchanged
The Federal Reserve’s decision to keep its interest rates unchanged was widely expected, sending stocks on a rally. The Dow, S&P 500 and Nasdaq ended 0.7%, 1.1% and 1.6%, respectively, on Nov 1.
The jump came despite the Federal Reserve maintaining its hawkish stance and casting worry. Fed Chair Jerome Powell said that the officials are still in a dilemma as they are not sure whether the current fiscal situation is tight enough to tame inflation or whether more restraints are required.
Moreover, the Fed didn’t give a clear picture of its future course of action with interest rate hikes. Instead, Powell said that they are open to more interest rate hikes if the situation demands, but are at the same time worried that higher interest rates could affect the economy’s health.
The Fed has increased interest rates by 525 basis points since March 2022, which has led inflation to decline sharply over the past year. Yet, inflation is way above the Federal Reserve’s 2% target.
However, investors are confident that the Fed would end its interest rate hiking campaign after increasing rates by another 25 basis points this year.
A pause in interest rate hikes twice in the past three months has made market participants optimistic ahead of the holiday season. The holiday season is a key sales window for retailers, and a steady rise in retail sales over the past few months has made them hopeful about recording robust sales this year, too.
Retail sales totaled $704.9 billion in September, jumping 0.7% after a 0.8% rise in August. The September figures also surpassed the consensus estimate of a rise of 0.3%. Year over year, retail sales increased a solid 3.8% in September. Also, the U.S. economy grew a solid 4.9% in the third quarter, surpassing estimates of a rise of 4.7% and the fastest in almost two years.
3 Best Choices
We have selected three mutual funds with significant exposure to the retail and discretionary sectors. The funds carry either a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to gain from the above factors. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors in identifying potential winners and losers. Unlike most fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also 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 Select Consumer Discretionary Portfolio fund invests the majority of its assets in common stocks of companies principally engaged in the manufacture or distribution of consumer discretionaries. FSCPX uses the fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions, for its decisions.
Fidelity Select Consumer Discretionary Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FSCPX has returned nearly 3% and 6.7% over the past three and five-year periods, respectively. Fidelity Select Consumer Discretionary Portfolio fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.76%, which is below the category average of 0.79%.
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 fund aims for capital appreciation. FSRPX invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.
Fidelity Select Retailing Portfolio fund has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 2% and 6.8% over the past three and five-year periods, respectively. Fidelity Select Retailing Portfolio fund has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.72%, which is below the category average of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Select Leisure Portfolio fund invests the majority of its assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries. FDLSX uses fundamental analysis of factors such as each issuer's financial condition and industry position, as well as market and economic conditions, for its decisions.
Fidelity Select Leisure & Entertainment fund has a history of positive total returns for more than 10 years. Specifically, FDLSX has returned nearly 12.2% and 10.1% over the past three and five-year periods, respectively. FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.74%, which is below the category average of 0.79%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>