The Fidelity Real Estate Income Fund (FRIFX) is one of the best mutual funds available for investors who want to participate in the U.S. real estate market. Unfortunately, the continued rise of interest rates has weakened the sector (see previous blog post) and FRIFX is not longer an attractive investment, at least until the real estate sector turns around.
Source: FidelitySignal.com
One of the weakest sectors of the stock market is real estate, according to the ETFnext.com economic cycle indicator.
Not surprising that the Fidelity Real Estate Portfolio Fund (FRESX) shows a weakening chart pattern. FRESX has moved below its 100 day moving average, which is another bearish sign. While it is possible for real estate stocks to bounce back to the top of the trading range, we would look for growth somewhere else in the coming weeks.
As we wrote in our blog entry on November 28, investing in real estate funds can be tricky. We wanted to see the Fidelity Select Construction and Housing Fund (FSHOX, last change: 2.19%) moving above the region of high volatility on the chart to turn even more bullish on the sector. The decisive move did occur today with FSHOX making an impressive gain and breaking out to a new 52-week high.
Buy/sell signals are available at FidelitySignal.com.
Identifying the best real estate investment funds for a given market environment can be tricky. This is especially true today with conflicting stories in the news media about the health of the real estate market. Indeed, we can see the diverging trends when we take a closer look at some of our favorite Fidelity mutual funds that invest in this space.
We have highlighted the Fidelity International Real Estate Fund (FIREX, last change: 0.22%) in past blog entries, as one of the best performing Fidelity funds in 2012. FIREX continues its stellar performance and has gained 34.32% year-to-date. The gains are driven by increased appetite for Chinese and European property shares. Adding to international real estate positions can make sense for aggressive investors, as long as the price stays above the bullish red trendline.
The Fidelity Select Construction and Housing Fund (FSHOX, last change: 0.44%) made a new 52-week high today driven by holdings in great performing stocks, such as Home Depot and Lowe’s. FSHOX has moved now to the number three spot in out daily momentum screen of Fidelity funds. However, we’d like to see a more decisive breakout from the recent high-volatility range before we would consider an overweight position in FSHOX.
The technical indicators for the Fidelity Real Estate Investment Fund (FRESX, last change: -0.29%) are negative with FRESX below its 100 day moving average and the trendline showing a downtrend. We would avoid investing in FRESX until we can see consolidation on the chart and the price starts moving above the moving average.
Technical analysis screens are provided by FidelitySignal.com
The Fidelity International Real Estate Fund (FIREX, last change: 0.00%) is the top performing Fidelity mutual fund of 2012 now with a 32.25% year-to-date gain. FIREX took the top spot from the Fidelity Biotechnology Fund (FBIOX), as the biotech sector has turned bearish in recent weeks. Although the trend for FIREX is still up, breaking the red trendline on the chart would caution us to take profits.
Technical analysis screens are provided by FidelitySignal.com
The Fidelity International Real Estate Fund (FIREX, last change: 1.02%) is one of the top performing Fidelity funds with a 31.06% return so far in 2012.
Technical analysis screens are provided by FidelitySignal.com
We highlighted the Fidelity Real Estate Income Fund (FRIFX, last change: 0.26%) earlier this year as one of the most consistent performers. FRIFX has continued its solid performance, just as the other Fidelity funds investing in real estate. What makes FRIFX stand out is the low volatility of the returns it has provided. This makes FRIFX one of the best Fidelity fund investments in 2012 on a risk-adjusted basis.
Technical analysis screens are provided by FidelitySignal.com
The Fidelity Select Medical Equipment fund (FSMEX) is one of the few funds finishing higher today in a weak market. Although the fund is above it’s 100 day moving average and one of the strongest amongst sector funds, the price pattern has not turned bullish yet.
The Fidelity Real Estate fund (FRESX) is down 2.63% after the close. Real Estate Income (FRIFX) is weakening too, but still stays in uptrend.
Fidelity Trends 