Sector Mutual Funds: How to Pick Winning Sector Funds and Avoid Losers

Sam Subramanian PhD, MBA

If you are looking to earn great returns from the stock market sector mutual funds are right up your alley.

Sophisticated investors recognize the potential sector mutual funds offer and know how to make such funds work for them.

You can consistently beat the market by investing in the right sector mutual fund at the right time. In fact, you can make money even in bear markets.

The trick to benefiting from sector mutual funds is to capture the rewards they provide while mitigating the risks they carry.

And, that's precisely what AlphaProfit helps you do ... make money by smartly investing in the right sector mutual fund at the right time.

AlphaProfit reliably selects winning sector mutual funds by combining fundamental and technical evaluation factors Sign up for AlphaProfit's FREE mutual fund newsletter

Select the Right Sector or Industry

Many investors make the mistake of choosing sectors or industries based on a single factor ... trend. Such selection methods are prone to high failure rates.

To help you consistently invest in the right sectors and time entries & exits, AlphaProfit analyzes sectors on both fundamental and technical factors within the context of the business cycle.

AlphaProfit significantly enhances your sector selection success rate by holistically analyzing sectors using a wide range of criteria including valuation, momentum, and news quality.

Pick the Best Sector Mutual Fund in the Selected Sector or Industry

Sector mutual funds come in different colors and flavors. While many sector mutual funds are actively managed, sector index funds and leveraged sector funds are available too.

Some sector mutual funds invest primarily in the U. S. while others scout for opportunities around the globe. Sector mutual funds that limit their investments to specific industries or company sizes in a sector are available as well.

Selecting the right fund in the right sector can go a long way in enhancing returns.

AlphaProfit combines top-down and bottom-up analyses to ascertain the best sector mutual fund within the sector. Analysis of the overall market environment both in the U. S. and across the globe is complemented with analysis of the mutual fund's top holdings, fund management style & consistency, fees & expenses, historical performance, and other factors.

Diversify across Top Sector mutual funds

Despite the rigor of the evaluation and selection process, there can be instances where investment in a sector mutual fund does not turn out to be exactly as expected. The performance of specific sector mutual funds can at times be affected by exogenous events like the earthquake in Japan or unanticipated industry changes like the ban on drilling in Gulf of Mexico.

To mitigate your risks, AlphaProfit brings together the sector mutual funds from top sectors to construct sector fund-based model portfolios for different investment objectives. AlphaProfit provides weightings for the individual sector funds with a view to minimize portfolio volatility.

Ensure Top Sector Mutual Funds Selections at all Times through Timely Sector Rotation

Mutual funds in different sectors tend to perform better in different stages of the business and interest rate cycles. Consumer discretionary sector funds like Fidelity Select Consumer Discretionary (FSCPX) tend to perform well as interest rates fall and the economy starts to recover from a recession while tech sector mutual funds like Allianz RCM Technology (DGTNX) tend to perform well during expansion phases.

AlphaProfit uses its time-tested sector rotation strategy to ensure sector mutual funds with outstanding return potential are included in the recommendations and model portfolios at all times. By the same token, the sector rotation strategy works to weed out sector mutual funds with inferior return potential in a timely manner.

Beat the Market with Sector Mutual Fund Recommendations and Model Portfolios

AlphaProfit's proven sector mutual fund selection process enables thousands of investors to thrive in turbulent markets.

AlphaProfit provides two market-beating sector fund-based model portfolios you can use in your regular and retirement accounts. Starting out with just a few thousand dollars, you can use the model portfolios to grow your investments to secure your retirement.

The AlphaProfit Focus model portfolio pursues aggressive growth while the AlphaProfit Core model portfolio is tailored for investors seeking long-term capital appreciation.

A dollar invested in the Aggressive Growth (Focus) and Capital Appreciation (Core) model portfolios is worth $26.17 and $13.28, respectively. This implies annualized returns of 19.9% and 15.5%, respectively. Comparable investments in the Dow Jones Wilshire 5000 and S&P 500 benchmarks are worth $3.86 and $3.74, respectively implying annualized returns of 7.8% and 7.6%, respectively.

Performance of sector mutual fund model portfolios as of December 31, 2011. Sign up for mutual fund newsletter

Dow Jones & Company’s Hulbert Financial unit has ranked the AlphaProfit Focus and Core model portfolios #1 rank numerous times.

Here are just a few examples of actual returns earned by AlphaProfit readers from individual sector mutual fund recommendations:

• 94.4% gain from Consumer Services ProFund, CYPIX
• 98.3% gain from Fidelity Select Wireless, FWRLX
• 77.1% gain from Rydex Retailing, RYRIX

Learn 5 Smart Ways of Using Sector mutual funds

Sign up for AlphaProfit’'s Free mutual fund newsletter MoneyMatters and receive your Free Report on 5 Smart Ways of Using Sector Mutual Funds.

Popular How-To Guides Sector ETFs: Select the Best Sector ETF Consistently Secrets to Boosting Your No Load Mutual Fund Returns Rollover IRA: A Booster Rocket for 401k Retirement Plans Fidelity Select Funds: Choose the Best Fidelity Sector Fund Best ETFs to Build Your ETF Portfolio Sector Mutual Funds: Picking Winners and Avoiding Losers Constructing a Top Mutual Fund Portfolio Diversified Portfolios with a Knock-Out Punch Select Sector SPDRs: Maximize Return and Minimize Risk A Guide to Analyzing Mutual Fund Returns Looking at Mutual Fund Fees the Right Way Custom Search

Recent MoneyMatters Articles Mutual Fund Picks for 2012 & The Best ETFs for 2012 Fidelity Select Funds: Best, Worst, & 2012 Forecast NTF Mutual Funds: Fidelity FundsNetwork Eases Rule Think Again Before Investing in China Buy, sell, or hold Fidelity Magellan mutual fund? Best Natural Gas Mutual Funds, ETFs, and Stocks Protect Yourself in a Haven of Guaranteed Growth Low Risk Mutual Funds for a Slow Growth Economy Fidelity Select Chemicals and Chemical ETFs Best Oil ETFs: Looking Beyond Energy SPDR XLE Commodity Exchange Traded Funds: Best Commodity ETFs More from Investing Blog Sign Up for Free e-letter

About AlphaProfit MoneyMatters and AlphaProfit
AlphaProfit MoneyMatters is a free e-letter distributed to registered users of AlphaProfit's website. The e-letter analyzes the economy, markets, and sectors and provides money-making insights on stocks, exchange-traded funds, and mutual funds. AlphaProfit MoneyMatters is edited by Dr. Sam Subramanian acclaimed for his financial acumen and analytical skills.

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 several times.

Copyright Policy and Fair Use Guide
You are welcome to quote a short excerpt of the article not exceeding 100 words with attribution in the form of a hyperlink to the article's full URL or http://www.alphaprofit.com. If you wish to republish the article in full on your website, blog, or other media, you must obtain permission.

AlphaProfit MoneyMatters™ is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual advice on investing. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. AlphaProfit Investments, LLC is not responsible for any errors or omissions. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from any of the investment companies, brokers or entities connected with the securities mentioned herein. Please review our Terms and Conditions of Use and Subscriber Agreement which is available on our website at www.alphaprofit.com; they govern your relationship with AlphaProfit Investments, LLC, including, but not by way of limitation, use of the AlphaProfit MoneyMatters.

This page is best viewed in 1024 by 768 pixels screen resolution or higher.
Copyright © 2011 AlphaProfit Investments, LLC. All rights reserved.