Best Performing Fidelity Mutual Funds and Top Rated ETFs:
AlphaProfit to Provide New Recommendations
The AlphaProfit Focus and Core model portfolios will be reconstituted on June 30 with best performing Fidelity mutual funds and top rated ETFs.
After advancing 8.2% in 2011 through May 2, stocks have skidded lower. Concerns of sovereign debt defaults in Europe and rising interest rates in China slowing global economic growth have impaired stock prices.
Declining 6.4% from its May high, the SPDR S&P 500 ETF (SPY) that tracks its namesake index is fractionally above the flat line for the year.
The SPDR Dow Jones Industrial Average ETF (DIA) that mirrors the Dow Jones Industrial Average has fared better gaining 3% while the PowerShares QQQ ETF (QQQ) is in negative territory for the year.
Commenting on the market environment, Dr. Sam Subramanian, Managing Principal of AlphaProfit Investments, LLC and Editor of the AlphaProfit's Premium Service Investment Newsletter said, 'Investor sentiment has changed 180-degrees from where it was at the start of 2011. Investors have shifted gears to a Risk-Off mode since April from a Risk-On mode at the dawn of the year.'
'Sectors like energy and industrials that led the rally through April have been among the bigger losers since then', said Dr. Subramanian.
Defensive groups like healthcare, telecom, and utilities now stand as leaders in the year-to-date performance table.
Health Care Select Sector SPDR ETF (XLV), Vanguard Telecom Services ETF (VOX), and Utilities Select Sector SPDR ETF (XLU) are up 10.1%, 5.7%, and 4.7%, respectively.
Shares in the healthcare group have benefited from strong M&A activity. Johnson & Johnson (JNJ) and Teva Pharmaceutical (TEVA) are acquiring Synthes and Cephalon (CEPH) for $21 billion and $6 billion, respectively.
Stock prices have come down on global macroeconomic worries even though corporate earnings are up this year.
The combination of falling stock prices and rising profits has pushed valuation metrics to historically attractive levels.
The S&P 500 is now valued at just 12.8 times forecasted 2011 earnings.
Dr. Subramanian points out that stocks are attractively valued from a historical perspective. He says, 'Only during 15 of the 306 months since 1985 has the S&P 500 traded below a 12.8 forward P/E.'
Best Performing Fidelity Mutual Funds and Top Rated ETFs
The AlphaProfit Core and Focus model portfolios will be repositioned with new recommendations of best performing Fidelity mutual funds and top rated ETFs on Thursday, June 30.
Valuation, momentum, and news quality are the three elements of the investment selection and risk management process AlphaProfit uses to consistently pick winners among Fidelity mutual funds and sector ETFs over both the long-term and short-term.
Compounding at an annual rate of 22.1%, a dollar invested in this selection process in 1994 is now worth $31.53 while a comparable investment in the S&P 500 is worth just $4.00.
Commenting on the near-term performance of the Fidelity and ETF model portfolios, 'Our recommendation to readers to shift money from materials to healthcare at the end of the first quarter has proven timely', said Dr. Subramanian.
Fidelity Select Health Care (FSPHX) and Health Care Select Sector SPDR ETF (XLV) are up 1.1% and 4.7%, respectively while Fidelity Select Gold (FSAGX) and Market Vectors Gold Miners ETF (GDX) are down 10.3% and 12.5%, respectively.
'So too has our recommendation to stay out of banks and brokerage firms since the start of 2011', added Dr. Subramanian.
Financials have been major losers this year as evident from the 7.4% decline of Financial Select Sector SPDR ETF (XLF). Fidelity Select Banking (FSRBX) and Fidelity Select Brokerage & Investment Management (FSLBX) are down a larger 9.2% and 10.5%, respectively.
While it can be difficult to invest in stocks against the backdrop of negative headlines, Dr. Subramanian believes that the summer months are likely to present good buying opportunities.
Elaborating on his market outlook, Dr. Subramanian says, 'Stock prices are likely to be higher rather than lower 3 to 6 months down the road.'
'Not much progress has been achieved in generating employment during this economic recovery. Government policies are likely to favor economic stimulus in this third year of the Presidential election cycle particularly if the economy starts to falter', asserts Dr. Subramanian.
'I believe investors in best performing Fidelity mutual funds and top rated ETFs are likely to come out ahead of those sitting on cash in this rising inflation-zero interest rate environment', concluded Dr Subramanian.
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AlphaProfit Investments, LLC is an independent investment research firm based in Sugar Land, TX. AlphaProfit publishes the AlphaProfit Sector
Investor's Newsletter, edited by Dr. Sam Subramanian. Leveraging sector funds, the Newsletter provides high-performance model portfolios
with Fidelity funds and exchange-traded funds.
It also includes actionable stock recommendations. This newsletter features among MarketWatch's top 10 investment newsletters and has won
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