Mutual Fund Picks for 2015 and The Best ETFs for 2015
AlphaProfit Provides New Fund Picks
The AlphaProfit Core and Focus model portfolios are reconstituted to include new mutual fund picks for 2015 and the best ETFs for 2015.
Year 2014 was a good one for large-cap U. S. stocks.
Fidelity Spartan 500 Index Fund (FUSEX) that tracks the popular S&P 500 index ($SPX) was up 13.6%.
Small-cap investments were not as rewarding.
Fidelity Spartan Small Cap Index Fund (FSSPX) that tracks the Russell 2000 small-cap index ($RUT) gained 5.0%.
Foreign markets did not fare well.
The Fidelity Spartan International Index Fund (FSIIX) that tracks the MSCI EAFE developed market stock index declined 5.5% while Vanguard FTSE Emerging Markets ETF (VWO) that invests in emerging markets ended a smidgen below the flat-line.
Commenting on global stock markets, Dr. Sam Subramanian, Editor of the AlphaProfit Premium Service Investment Newsletter said, 'Robust U. S. economic data, tame inflation, and a supportive Federal Reserve helped U. S. stocks to advance in 2014 while weaker economic conditions, political turmoil, and a stronger dollar weighed on foreign stocks.'
The yield on the 10-year Treasury bond declined 86 basis points in 2014 to end the year at 2.17%.
The backdrop of dropping yields helped interest-rate sensitive sectors to ascend to the top of the performance tables.
Vanguard REIT ETF (VNQ) and Utilities Select Sector SPDR (XLU) for example gained 30.4% and 28.7%, respectively.
Commodity-related sectors lagged. Energy Select Sector SPDR ETF (XLE) was the worst performing Select Sector SPDR ETF losing 8.7%.
Gold stocks continued their underperformance for a fourth straight year. The Market Vectors Gold Miners ETF (GDX) that invests in gold stocks fell 12.4% while the price of the yellow metal as tracked by SPDR Gold Shares ETF (GLD) declined 2.2%.
Investments in the health care sector fared well. So too did specific industries from certain sectors. Semiconductors in the information technology sector, transportation in the industrial sector, and real estate in the financial sector were standouts.
In 2014, AlphaProfit Premium Service subscribers made money from the following top performing mutual funds picks and best ETFs in the these industries.
Fidelity Select Electronics (FSELX), Fidelity Select Transportation (FSRFX), and Fidelity Select Health Care (FSPHX) gained 38.4%, 34.0%, and 32.9%, respectively.
Likewise, PowerShares Dynamic Semiconductors ETF (PSI), and, SPDR S&P Transportation ETF (XTN), and iShares Cohen and Steers REIT (ICF) with gains of 37.4%, 33.9% and 35.2%, respectively were among the best ETFs for 2014.
Prescient picks of winning mutual fund and best ETFs has enabled AlphaProfit's Premium Service to consistently rank #1 among investments newsletters tracked by Hulbert Financial Digest.
Compounding at an annual rate of 20.3%, a dollar invested in AlphaProfit's selection process in 1994 is now worth $48.86 while a comparable investment in the S&P 500 is worth just $6.63.
Mutual Fund Picks for 2015 and the Best ETFs for 2015
The U. S. economy is growing at a good clip.
After expanding at a 4.6% annual rate in the second quarter, gross domestic product grew at a 5.0% annual rate in the third quarter.
The employment picture has brightened. Monthly job creation has averaged 241,000 in 2014 compared to 194,000 in 2013.
Confidence in the sustainability of this economic expansion has emboldened the Federal Reserve to scale down aggressive stimulus programs initiated after The Great Recession.
Dr. Subramanian expects U. S. stocks to advance in 2015. He however expects their gains in 2015 to trail those in 2014.
After more than doubling from their 2009 low, companies in the S&P 500 index on average trade at 15.8-times forward EPS. This exceeds their prior 5-year and 10-year averages of 13.6 and 14.1, respectively.
Meanwhile, analysts expect S&P 500 company earnings to grow 7.9% in 2015, up from 5.7% forecasted in 2014.
Dr. Subramanian cautions tepid growth in foreign economies and a stronger U. S. dollar can be a headwind for earnings growth.
As such, the combination of rising valuation metrics and higher growth expectations can make stocks vulnerable to disappointments.
Dr. Subramanian expects stocks to be more volatile in 2015 than they have been in 2014 as the economic cycle matures and interest rates move up.
In this milieu, investors need to give valuation due consideration and not chase growth.
This is exactly what AlphaProfit's time-tested ValuM investment process does by judiciously blending fundamental and technical analyses to consistently choose the best Fidelity Select funds and the best sector ETFs.
Subscribers to AlphaProfit's Premium Service investment newsletter get timely recommendations on best mutual funds, ETFs, and stocks.
AlphaProfit's Fidelity and ETF Core and Focus model portfolios are reconstituted with new mutual fund picks for 2015 and the best ETFs for 2015.
'Even though downside risks for stocks have increased in 2015, U. S. stocks are likely to outperform bonds and cash ... just as they did in 2014. We look forward to provide AlphaProfit Premium Service subscribers with the best mutual fund picks for 2015 and the best ETFs for 2015. We also intend to provide timely asset allocation advice to help them protect their gains before the markets retreat and position their investments for growth before markets rally', 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
the coveted #1 rank from Hulbert Financial
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