As the equity market correction unfolds, the current list of the top 10 Fidelity mutual funds shows a dramatic shift compared to what we have seen throughout the year: seven out of the top ten funds are now income funds.
One of the most important new developments is that the yield of the 30-year Treasury bond continues in a downtrend causing long-term Treasury bonds to to resume a very strong uptrend:
The weakest investments that I highlighted in previous blog articles, such as mutual funds investing in the Eurozone and energy, have continued to decline. However, they are so oversold now that it would not be surprising to see a relief rally.
The market leaders of the last 12 months, including technology and communications sectors, are turning over now, which is a worrisome sign about the short-term prospects of the stock market:
The list of the top 10 Fidelity funds (ranking provided by FidelitySignal) is currently dominated by mutual funds that invest in the health care and technology sectors, but large cap, retailing, brokerage and chemical funds have also made the list. I’d like to highlight here the Fidelity Select Brokerage (FSLBX) and the Fidelity Select Chemical (FSCHX) funds. Both FSLBX and FSCHX has positive relative strength compared to the S&P 500 index, which shows the potential of these sectors to outperform the market in the seasonally volatile fall period.
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.