Best Performing Fidelity Mutual Funds and Top Rated ETFs
AlphaProfit Provides New Recommendations
AlphaProfit Focus and Core model portfolios are reconstituted with best performing Fidelity mutual funds and top rated ETFs.
The first-half of 2013 has turned out favorable for U. S. stocks.
The Fidelity Spartan 500 Index Fund (FUSEX) that tracks the S&P 500 index ($SPX) has gained 14%.
Stocks managed to ascend through most of this period avoiding a 5% pullback.
The relatively smooth ride however ended on May 21 when Federal Reserve Chairman Bernanke broached the topic of reducing monetary stimulus.
Stocks sold off between May 21 and June 24 with the S&P 500 losing over 5%.
Discussing the recent performance of the U. S. stock market, Dr. Sam Subramanian, Editor of AlphaProfit's Premium Service Investment Newsletter said, 'The Federal Reserve's bond buying program has kept interest rates low for several months and helped stock prices to rally. Bernanke's comment on paring bond purchases unnerved investors. As interest rates rose, investors felt compelled to take profits.'
All of the 10 major sectors in the S&P 500 have advanced during the first-half.
Healthcare, financial, and consumer discretionary sectors are the leaders.
In the Sector SPDR universe, Healthcare Select Sector SPDR ETF (XLV), Financial Select Sector SPDR ETF (XLF), and Consumer Discretionary Select Sector SPDR ETF (XLY) have all gained over 19%.
As for losers, gold stocks stand out. The average precious metal mutual fund has lost 46%. Fidelity Select Gold (FSAGX) for example has declined 48% in the first-half.
The steep selloff in high-dividend yielding stocks after May 21 limited gains in the electric utility, real estate, and telecommunication sectors.
In the Fidelity sector fund universe, Fidelity Select Utilities (FSUTX), Fidelity Real Estate Investment (FRESX), and Fidelity Select Telecommunications (FSTCX) returned 11%, 6%, and 11%, respectively.
AlphaProfit's sector-based Core and Focus model portfolios benefited from the selection of best performing Fidelity mutual funds and top rated ETFs in 2013.
The AlphaProfit Fidelity Core and Fidelity Focus portfolios are up 18.2% and 19.8%, respectively while the AlphaProfit ETF Core and ETF Focus model portfolios are up 15.2% and 17.4%, respectively.
Commenting on the performance of AlphaProfit model portfolios, Dr Subramanian said, 'They benefited from superior selection of industry groups in leading sectors ... automotive in consumer discretionary, biotechnology in healthcare, and capital markets in financial.'
The ETF model portfolios have advanced from contributions made by First Trust NASDAQ Global Auto (CARZ), SPDR S&P Biotech (XBI), and SPDR S&P Capital Markets (KCE) that have gained over 18% each.
The Fidelity model portfolios have benefited from contributions made by Fidelity Select Automotive (FSAVX), Fidelity Select Biotechnology (FBIOX), and Fidelity Select Brokerage & Investment Management (FSLBX) that have risen 23%, 29%, and 21%, respectively.
Outlook for Best Performing Fidelity Mutual Funds and Top Rated ETFs
The Federal Reserve Open Market Committee's statement following its June 19 meeting has spooked investors.
While the FOMC left the monthly pace of bond purchases unchanged at $85 billion, it stated that 'downside risks to the outlook for the economy and the labor market' have diminished.
Accordingly, the Fed would start to reduce the rate of bond purchases later this year if incoming data are broadly consistent with forecasts of unemployment dropping below 6.5% and economy growing between 3% and 3.5% in 2014.
Discussing the FOMC's statement Dr. Subramanian said, 'The Fed's comments led investors to surmise the central bank could pare stimulus measures to the tune of $20 billion a month relatively soon ... perhaps as early as September'.
In the near-term, stock prices are likely to be volatile as investors try to decipher when & how the Fed may curtail its bond purchase stimulus program.
Dr. Subramanian believes downside for best performing Fidelity mutual funds and top rated ETFs should be limited as the Fed is unlikely to rush to taper stimulus.
Elaborating Dr. Subramanian said, 'The U. S. economy is expanding at a slow pace. At 7.6%, the unemployment rate is still far above the Fed's 6.5% target. Further, inflation is well below the Fed's 2.5% tolerance level. As such, the Fed has ample reason to maintain stimulus.'
Dr. Subramanian believes the likelihood of stock prices rising over a multi-month horizon is higher than the likelihood of stock prices losing ground since tapering of stimulus is not necessarily bearish for stocks.
He argues, 'Best performing Fidelity mutual funds and top rated ETFs can continue to advance if the Fed tapers stimulus due to an improvement in the economy. The uplift in corporate revenue from stronger product & service demand can more than offset the increase in interest expense and help earnings to grow.'
'But, a scenario in which rising inflation expectations force the Fed to taper stimulus would not be quite so positive for best performing Fidelity mutual funds and top rated ETFs,' Dr. Subramanian admits.
Best Performing Fidelity Mutual Funds and Top Rated ETFs
The AlphaProfit Core and Focus model portfolios now include new recommendations of best performing Fidelity mutual funds and top rated ETFs. Learn more about AlphaProfit's Fidelity fund recommendations and ETF model portfolios.
Valuation, momentum, and news quality are the three elements of AlphaProfit's investment selection and risk management process that help to consistently pick winning Fidelity Select funds and sector ETFs.
Compounding at an annual rate of 20.5%, a dollar invested in this selection process in 1994 is now worth $38.01 while a comparable investment in the S&P 500 is worth just $5.05. This market-leading performance has enabled AlphaProfit Premium Service investment newsletter to bag Hulbert Financial Digest's #1 rank 12 times.
Commenting on the new Fidelity mutual fund and ETF recommendations Dr. Subramanian pointed out, 'Money market funds yield nothing. Opportunities in the bond market are not enticing. Stock investments in Europe and China call for caution. U. S. stocks are relatively attractive to own in this milieu.'
'Rising interest rates can be detrimental for stocks. Our new recommendations in the AlphaProfit Fidelity and ETF portfolios safeguard against this risk. Investors allocating appropriate monies to best performing Fidelity mutual funds and top rated ETFs stand to reap measurable rewards in the period ahead', 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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