Sector Rotation: Three Fidelity Technology Funds are Moving to the Top

The question about the tapering of the Fed’s QE3 program dominated the markets today. The S&P 500 index managed a modest gain of 0.63% and closed at 1786.54.

As the broad U.S. equity averages continue to stay in bullish territory, one of the most important changes in market dynamics is the re-emergence of technology, as one of the market leading sectors. Fidelity has several tech funds that can help investors to take advantage of this new trend. Here we highlight three of them:

The Fidelity Select Electronics Fund (FSELX) was the best-performing Fidelity mutual fund today (source: www.fidelitysignal.com/market_indicators). FSELX top holdings include large cap technology companies, such as Intel, Broadcom, Qualcomm and Micron. FSELX reached a new 52-week high today and we would not be surprised to see it become one of the top funds in the next market cycle.

fselx

The other two tech funds we’d like to highlight are the Fidelity Select Software and Computer Fund (FSCSX) and the Fidelity Select IT Services Portfolio Fund (FBSOX). Both funds continue to show an almost uninterrupted bullish trend since the April market correction.

fscsx

fbsox

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

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Large Price Drop of Fidelity Contrafund is due to Capital Gains Distribution

The Fidelity Contrafund (FCNTX) is a highly popular equity fund with a large-cap bias. Although large cap stocks did sell off Friday, the unproportionally large 6.69% drop in the net asset value (price) of FCNTX alarmed some investors.

fcntx

The explanation for the large price drop is that Fidelity distributed both dividends and capital gains for a number of their funds with a pay date of Monday, December 16.

The most recent dividends and the capital gains distributions for Fidelity funds are available on the following website:

https://www.fidelity.com/mutual-funds/prices-documents/distributions

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

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Huge Market Rally Today as Investors Hope for the Resolution of the Government Shutdown; Fidelity China Region Fund Rises to the Top

Fidelity China Region Fund (FHKCX, last change: 1.08%)

The Fidelity China Region Fund (FHKCX, last change: 1.08%) is currently the best Fidelity mutual fund, based on the fund ranking provided by FidelitySignal.com. The increasingly positive tone of the news in the last three months suggests that that the Chinese economy is in a better shape, than previously thought. As the result, the Chinese stock market has entered into a strong bull market.

 

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

 

The Biotech Sector is Hit the Hardest in the Market Sell-Off

Fidelity Select Biotechnology Fund (FBIOX, last change: -5.07%)

The stock market sold-off sharply today due to fears about the impact of the government shutdown and the stall of the budget ceiling negotiations in Washington. High flying sectors, such as Biotechnology and Internet were hit the hardest in the sell-off. The Fidelity Select Biotechnology Fund (FBIOX, last change: -5.07%) was down the most out of all Fidelity mutual funds.

 

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

Best Fidelity Mutual Fund of 2013: Select Biotechnology Fund; Commodity Funds are also Gaining Momentum;

Fidelity Select Biotechnology Fund (FBIOX, last change: 2.05%)

The stock market rallied today in spite of the government shut down. The top Fidelity mutual fund, the Select Biotechnology Fund (FBIOX, last change: 2.05%) gained the most in today’s session. FBIOX has returned a stellar 62.86% so far in 2013 and shows no signs of slowing down. Also notable, that commodity-related mutual funds made it to the top 10 list today. These are the Fidelity Select Natural Gas (FSNGX) and the Fidelity Global Commodity Stock (FFGCX) funds.

Buy/sell signals for Fidelity funds are available at FidelitySignal.com

Top 10 Fidelity Sector Funds For The Summer Rally

Fed chairman Bernanke’s comment last week stating that the Fed’s policy will be highly accommodative for the foreseeable future led to an across-the-board rally for the U.S. stock market. The market looks decidedly bullish, with many sectors breaking out to new highs.

On the other hand, we are in the middle of the earnings season, which is often associated with increased volatility. Given the current market environment, what are the best investment choices for Fidelity investors?

To answer this question, first lets look at the data. The table below shows the ranked list of the top 10 Fidelity mutual funds based on three-month return, a measure of price momentum.

Top 10 Fidelity Mutual  Funds

Top 10 Fidelity Mutual Funds

Source: FidelitySignal.com

Surprisingly, all of the Fidelity funds on the top 10 list are sector funds. This is highly unusual. Even a few months ago, we would have seen international funds (e.g. Japanese funds) or other investment choices on this list. Even beaten down sector funds, such as the Fidelity Real Estate Investment Fund (FRESX), are now turning bullish. Consequently, the data tells us that smart money is on U.S. sector investments right now.

The second observation is that the list of top Fidelity funds is highly diversified. In addition, all of the ten funds have returned more than 10% in the last three months, in spite of the recent market correction.

The current leaders are the Fidelity Select Automotive (FSAVX), the Fidelity Select Biotechnology (FBIOX) and the Fidelity Select Banking (FSRBX) funds. In addition, it is important to note that four out of the ten funds are related to the finance sector.

Companies investing in the consumer sector are also bullish. The best fund to play this trend is the Fidelity Select Retailing (FSRPX) fund.

For investors who are looking for emerging trends in technology, the Fidelity Select Software and Computers (FSCSX), the Fidelity Select IT Services (FBSOX) and the Fidelity Select Electronics (FSELX) funds offer new opportunities.

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

Top 7 Fidelity Select Funds for Sector Rotation Strategies

The stock market reacted positively to a better-than-expected job report today with all major indexes closing higher. The rally came as a relief after days of selling in both global and U.S. markets.

The market leading investments for the first six months of 2013 were Japanese stocks and the U.S. biotechnology sector. Now, as the summer gets under way, new sectors are emerging with the potential to take over market leadership.

The newly emerging sectors with increasing momentum include the automotive, health care, brokerage, defense, insurance, retailing and consumer discretionary sectors. We’ll be tracking the corresponding Fidelity Select funds closely for the next few weeks for early signs of the summer rally.

The Top 7 Fidelity Select funds with market leading momentum to be considered for sector rotation strategies are:

Fidelity Select Automotive Fund (FSAVX, last change: 2.00%)

Fidelity Select Automotive Fund (FSAVX, last change: 2.00%)

Fidelity Select Health Care Fund (FSPHX, last change: 1.38%)

Fidelity Select Health Care Fund (FSPHX, last change: 1.38%)

Fidelity Select Brokerage and Investment Fund (FSLBX, last change: 2.23%)

Fidelity Select Brokerage and Investment Fund (FSLBX, last change: 2.23%)

Fidelity Select Defense and Aerospace Fund (FSDAX, last change: 1.38%)

Fidelity Select Defense and Aerospace Fund (FSDAX, last change: 1.38%)

Fidelity Select Insurance Fund (FSPCX, last change: 1.56%)

Fidelity Select Insurance Fund (FSPCX, last change: 1.56%)

Fidelity Select Retailing Fund (FSRPX, last change: 1.74%)

Fidelity Select Retailing Fund (FSRPX, last change: 1.74%)

Fidelity Select Consumer Discretionary Fund (FSCPX, last change: 1.71%)

Fidelity Select Consumer Discretionary Fund (FSCPX, last change: 1.71%)

Buy/sell signals for Fidelity funds are available at FidelitySignal.com 

Long-term treasury bonds are the weakest performers of the day

The Fidelity Spartan Long-term Treasury Bond fund (FLBIX, change: -1.28%) pulled back the most today out of all of the Fidelity funds we track. Nevertheless, FLBIX continues to be the best fund year-to-date with a 21.1% gain.

The Fidelity Spartan Long-term Treasury Bond fund (FLBIX, change: -1.28%) was the weakest performer today.

The Fidelity Spartan Long-term Treasury Bond fund (FLBIX, change: -1.28%) was the weakest performer today and continues the regression towards its trendline.

Mutual fund screens are provided by FidelitySignal.com  

Bear corner: panic selling of Chinese stocks makes the China fund the worst performer of 2011

Relentless selling of stocks in Asia continued today. The most brutal selling happened for Chinese stocks, which makes the Fidelity’s China fund the worst international performer of 2011 so far, with a 27.59% loss year-to-date.

Fidelity China Region fund (FHKCX, change: -4.39%)

Fidelity China Region fund (FHKCX, change: -4.39%)

Mutual fund screens are provided by FidelitySignal.com

Beaten down sectors are taking a stand today

A remarkable thing happened today. All, I repeat all, of the dozens of Fidelity’s U.S. sector funds closed higher. The winner of the day was the Fidelity Select Banking fund (FSRBX), which represents one of the most beaten down investment sectors. FSRBX gained an incredible +4.46% today.

The rally came in response to positive news about a new opportunity to fix the European debt crisis. From the standpoint of U.S. mutual fund investors the best case scenario is that the market sectors can define a support level at this price point, which will hopefully hold as the historically dangerous fall season approaches.

Fidelity Select Banking fund (FSRBX, change: 4.46%)

Fidelity Select Banking fund (FSRBX, change: 4.46%)

However, we continue to caution investors from jumping in with risky bets until the financial markets settle down and enter into a nice and easy uptrend.

Mutual fund screens are provided by FidelitySignal.com