Home page Company name and slogan

Custom Search
Investment Newsletters Best Fidelity Funds Best ETFs Get Free Reports 10-Year Journey Blog
MoneyMatters Logo

AlphaProfit MoneyMatters Investing Blog RSS Feed

Sam Subramanian

Fidelity Select Funds: Best Fidelity Select Funds for 2018

Sam Subramanian PhD, MBA

Fidelity Select Technology leads the performance table in 2017 with a year-to-date return of 51%. This compares with a decline of 18% for the year's worst performer, Fidelity Select Natural Gas. Which Fidelity Select Fund will be 2018's best performer?

The year 2017 is ending on a strong note.

Starting the year below 19,800, the Dow Jones Industrial Average has added nearly 5,000 points this year.

With just a few more trading days to go, Fidelity Spartan 500 Index Fund (FUSEX) that tracks the S&P 500 index ($SPX) is up 22% for the year.

Technology stocks have been major beneficiaries of strong growth in foreign markets and a declining dollar.

Fidelity Select Technology (FSPTX) with a year-to-date return of 51% leads the performance table for Fidelity sector funds.

Other funds from the technology sector follow.

Fidelity Select Software & IT Services (FSCSX), Fidelity Select Semiconductors (FSELX), Fidelity Select Computers (FDCPX), and Fidelity Select IT Services (FBSOX) claim the second through fifth spots of the performance table with returns ranging between 34% and 39%.

Other sectors such as consumer cyclicals, health care, and industrials too have prospered in 2017.

With the result, 37 of the 41 Fidelity sector funds are in the black this year.

Commodity-oriented funds, which claimed the top spots of the 2016 performance table, now scrape the bottom.

Fidelity Select Natural Gas (FSNGX) is the year's worst performer, losing 18%. Fidelity Select Energy Services (FSESX) follows with a 16% decline.

Performance quotations from investors using fidelity mutual funds model portfolios
Fidelity Select Funds: Best Fidelity Select Funds for 2018

Synchronized global growth has helped technology stocks to fare well in 2017 while abundant natural gas supplies and a decline in offshore drilling weighed on energy stocks.

Get timely market insights by signing up for the Fidelity Newsletter

Fidelity Select Funds: The Market Milieu in 2018

The U. S. economy and major economies around the world are expanding at a healthy rate.

The Commerce Department recently reported U. S. gross domestic product expanded at a 3.2% annual rate in the third quarter of 2017.

There is little evidence for a recession in the next six months.

As for U. S. stocks, they are in the ninth year of the bull market and appear fully valued.

According to FactSet, the 12-month forward price-to-earnings ratio for the S&P 500 stocks currently stands at 18.3. The P/E ratio has averaged 15.8 and 14.2 over the past 5 years and 10 years, respectively.

Analysts expect S&P 500 companies to grow their earnings by 11.8% in 2018, helped by a lower corporate tax rate, continued synchronized global growth, and prospects for continued deregulation.

See US Stock Market Forecast for 2018.

The reaction of stock prices to third-quarter earnings results suggests that the bull market is in its later stages of the cycle.

Companies missing analysts' earnings estimates were punished more than average while companies beating estimates were barely rewarded.

With the unemployment rate at a post-2001 low of 4.1% and major global economies forecasted to grow in 2018, inflation driven by wage growth or rising commodity prices is a risk.

AlphaProfit's optimistic case scenario projects low double-digit returns for the broad US stock market in 2018.

However, investors focusing on specific industries and sectors can earn superior returns in this milieu.

Fidelity Select Funds: Best Sectors for 2018

AlphaProfit uses its multidimensional sector evaluation and selection process to select industries and sectors with superior return potential. The selections help subscribers to protect and grow their assets with low volatility.

See Fidelity Select Funds: Choose the Best Fidelity Sector Fund Consistently.

AlphaProfit's sector evaluation & selection process currently favors investments in the financial services, information technology, and materials sectors for 2018.

Financial services: Following the signing of the Tax Cuts and Jobs Act into law, financial service firms are expected to be major beneficiaries of lower corporate tax rates. They should also profit from higher interest rates and relaxation in regulations expected next year. A growing bottom line should enable financial service firms to buy back shares and raise dividends.

Information technology: Information technology companies stand to benefit from global economic growth. Additionally, they should benefit from lower taxes on repatriation of cash they have stashed overseas. Secular growth in demand for products is being driven by innovations such as virtual/augmented reality, wearables, Internet of Things, the blockchain, and autonomous vehicles to name just a few.

Materials: Companies in the materials sector have everything going for them. They are typically companies paying a high tax rate. As such, lower corporate tax rates in 2018 should help them save a tidy sum. Stronger global growth also translates into stronger demand for commodities from which materials companies stand to prosper. Lastly, materials stocks have the added advantage of serving as a hedge against inflation.

Best Fidelity Select Funds for 2018

Investors can invest in Fidelity Select funds with latitude to invest across the entire sector such as Fidelity Select Financial Services (FIDSX), Fidelity Select Materials (FSDPX), and Fidelity Select Technology (FSPTX) to profit from the above trends.

However, investors can earn higher returns at lower volatility by targeting specific industries in the financial services, information technology, and materials sectors.

On Friday, December 29, AlphaProfit will reconstitute its Fidelity Core and Fidelity Focus model portfolios with a mix of Fidelity Select funds to help Premium Service subscribers protect and grow their assets.

To get timely recommendations of best Fidelity funds in AlphaProfit's Fidelity Core and Fidelity Focus model portfolios, subscribe to AlphaProfit Premium Service now.

Fidelity Fund Newsletter

Sign up for AlphaProfit's FREE Fidelity newsletter MoneyMatters and get two special reports:
Five Smart Ways of Using Fidelity Select Funds and Avoid Three Common Mistakes ETF Investors Make

Related Links:
Fidelity Funds Model Portfolios
Best Fund Recommendations from Fidelity FundsNetwork
Fidelity Mutual Funds Model Portfolios Performance


Protect & grow your wealth with
investment recommendations from free e-letter
AlphaProfit MoneyMatters

By Hulbert #1 rank winner Dr. Sam Subramanian

'Incisive Insights, Impressive Results'   - Jim Woodruff

First Name:

Email Address:

We respect your privacy. We will not spam or sell your information to others, period.

Popular How-To Guides

Custom Search

Recent MoneyMatters Articles

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 https://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 © 2016 AlphaProfit Investments, LLC. All rights reserved.