Select Materials Fund Shows Negative Relative Strength

The stock market sell off yesterday caused all Fidelity select sector funds to decline. As we approach the often volatile fall season we are not surprised to see investors reducing “risk on” investments. To identify the weakest sectors we use relative strength that measures the performance of a given investment compared to the S&P 500 index.

One of the weakest Fidelity funds based on this measure is the Select Materials Portfolio (FSDPX). The top panel of the FSDPX chart below shows that the relative strength is declining at an accelerated pace (see blue line). This suggests that the net asset value of FSDPX can decline more rapidly than the equity market in case of a continued sell off.

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

 

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Large Price Drop of Multiple Fidelity Funds is due to Capital Gains Distribution

Investors may have been alarmed by the large price drops of several Fidelity funds at the end of the Friday trading session. The drop in the net asset value (NAV) of these funds was largely due to the distribution of capital gains, which happens periodically. For more details click below:

Here are a few examples of Fidelity funds with large price drops:

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