Weakening growth in international markets, the strengthening dollar and the prospect of higher interest rates in the U.S. negatively impacted emerging markets in September. The chart of the Fidelity Emerging Markets Fund (FEMKX) below shows that after a brief rally in August, the bullish trend sharply reversed and FEMKX is now in a bearish downtrend.
Fidelity has several funds that allow investors to make region-specific bets in emerging markets. The comparison of these regional funds show that the Latin America Fund (FLATX) and the Emerging Europe, Middle East and Africa Fund (FEMEX) are the weakest, while the Southeast Asia Fund (FSEAX) has held up better:
The U.S. stock market regained the bullish momentum today with 82.5% of the Fidelity Select sector funds closing higher. The top gainer was the Fidelity Select Consumer Discretionary Fund (FSCPX, last change: 1.18%). FSCPX has returned 13.65% year-to-date handily beating the return of the S&P 500 index.
One of our favorite sector funds in 2013 is the Fidelity Select Multimedia Fund (FBMPX, last change: 1.06%). FBMPX is one of the top 10 Fidelity mutual funds based on the daily ranking provided by FidelitySignal.com. FBMPX holds an impressive list of media companies that generate broadcast, online and print content. It seems that content is king in 2013.
Emerging markets continue to under perform this year. The newest addition to the list of funds in a bearish downtrend is the Fidelity Emerging Europe and Middle East Fund (FEMEX, last change: -0.68%). We continue to underweight investments in emerging markets and focus on the best U.S. sectors for generating investment returns.