Mutual Fund Picks for 2013 and The Best ETFs for 2013
AlphaProfit Provides New Fund Picks
The AlphaProfit Core and Focus model portfolios are reconstituted to include new mutual fund picks for 2013 and the best ETFs for 2013.
Macro concerns in U. S., Europe, and China weighed on investor sentiment for most of 2012.
They did not however prevent stocks from having a good year.
Year 2012 actually turned out quite favorable for stocks.
Stocks have recorded double-digit gains in many parts of the world.
The Fidelity Spartan 500 Index Fund (FUSEX) that tracks the popular S&P 500 index ($SPX) was up 16% for the year.
Foreign developed and emerging markets also saw sizeable gains. iShares MSCI ACWI ex U. S. ETF (ACWX) that tracks the MSCI ACWI ex U. S. Index was up 17%.
Troubles in Europe did not prevent developed market stocks from faring better than their U. S. counterparts. The Fidelity Spartan International Index Fund (FSIIX) that tracks the MSCI EAFE developed market stock index is up nearly 19%.
The Vanguard ETF (VWO) that invests exclusively in emerging markets is up 19% for the year.
Commenting on global stock markets, Dr. Sam Subramanian, Editor of the AlphaProfit Premium Service Investment Newsletter said, 'Actions taken by the global central banks gave investors some comfort in 2012. Bond-buying programs pursued by the Federal Reserve and the European Central Bank provided investors hope U. S. and European economies would not get worse.'
From a sector perspective, commodity-oriented sectors lagged in 2012. Energy Select Sector SPDR ETF (XLE) was up 5% while Market Vectors Gold Miners ETF (GDX) that invests in gold stocks was down 9%.
The more U.S.-centric, economically sensitive sectors led the rally. The Financial Select Sector SPDR ETF (XLF) and Consumer Select SPDR (XLY) gained 28% and 24%, respectively.
Specific industries from certain sectors fared notably well. Housing in the consumer discretionary sector, biotechnology in the healthcare sector, and consumer finance in the financial sector were standouts.
Among Fidelity sector funds, Fidelity Select Construction & Housing (FSHOX), Fidelity Select Biotechnology (FBIOX), and Fidelity Select Consumer Finance (FSVLX) with gains of 38%, 36%, and 34% turned out to be the best mutual funds picks for 2012.
Likewise, iShares DJ U. S. Home Construction (ITB), SPDR S&P Biotech (XBI) and iShares DJ U. S. Financial Services (IYG) with gains of 79%, 33% and 33% were the best ETFs for 2012 in these industries.
During 2012, AlphaProfit Fidelity and ETF model portfolios provided to Premium Service subscribers included top performing mutual funds and best ETFs in biotechnology and housing industries.
These timely selections enabled the AlphaProfit Fidelity and ETF model portfolios to gain between 19% and 21% in 2012 and outperform the S&P 500.
Compounding at an annual rate of 20.1%, a dollar invested in AlphaProfit's selection process in 1994 is now worth $32.37 while a comparable investment in the S&P 500 is worth just $4.41.
Consistent selection of winning mutual fund picks has enabled AlphaProfit's Premium Service to rank #1 in Hulbert Financial's investment newsletter rankings 12 times.
Mutual Fund Picks for 2013 and the Best ETFs for 2013
The House of Representatives has now passed the Senate-approved compromise that undoes the austerity measures scheduled to go into effect at the start of 2013. The compromise averts broad tax hikes and heavy spending cuts. The contentious issue of raising the U. S. debt limit has however been deferred.
While the fiscal cliff has been avoided, Congressional action leaves room for a potentially nastier fight down the road.
The uncertainty stemming from the fiscal cliff has been a drag on the economy as businesses have reacted by delaying investment decisions. This increases the risk of fourth quarter earnings shortfalls.
Dr. Subramanian says, 'Given the uncertainty in earnings growth, investors have to be quite selective in their investments in the early part of 2013. Companies and sectors with unique advantages and easy comparisons can fare well in this environment.'
Looking beyond the fiscal cliff issue, strength in the U. S. housing market, acceleration in China's growth, and stabilization in Europe can improve the investing milieu. The outlook for corporate profits can also improve in 2013 if market-friendly fiscal policies and economic reforms are implemented in the U. S., Europe, and China.
Stock valuation metrics are modest and corporate fundamentals relatively robust. S&P 500 members trade at around 14 times the amount they earned per share over the past 12 months, lower than the long-term average of 16.4. Improving profitability has helped these companies pile up $1.7 trillion in cash on their balance sheets.
Dr. Subramanian elaborated, 'Improving outlook for corporate profits coupled with reasonable valuations and strong corporate balance sheets can drive stock prices up. The odd of stocks delivering higher returns than bonds & cash in 2013 are high'.
As such, the prudent course is to adopt a flexible and adaptive process like AlphaProfit's ValuM investment process. This process combines fundamental and technical factors to consistently choose the best Fidelity Select funds and the best sector ETFs.
AlphaProfit's Premium Service investment newsletter subscribers receive timely recommendations on best mutual funds, ETFs, and stocks.
The AlphaProfit's Core and Focus model portfolios are repositioned with new mutual fund picks for 2013 and the best ETFs for 2013.
'We look forward to provide the best mutual fund picks for 2013 and the best ETFs for 2013. We also intend to provide timely asset allocation advice to help investors maintain downside protection during the bearish phases and position their portfolios for market-beating gains during the bullish phases', concluded Dr. Subramanian.
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By Hulbert #1 rank winner Dr. Sam 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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