5 Best-Performing Fidelity Mutual Funds Of Q3

Fidelity is expected to get more attention from investors in the coming months on the back of strong performance in the third quarter. The third largest fund family in terms of assets under management is successfully providing investment advice and wealth management services to its clients. Its ability to offer low cost mutual funds consistently, effective fund management and the capability to survive market volatility have resulted in strong fund performance.

Fidelity Lowers Fund Costs

Fidelity Investments has successfully provided index funds and sector ETFs at a lower cost than one of its immediate competitor, Vanguard. In the third quarter of this year, Fidelity announced that the total expense ratio of 14 of its bond and stock index funds will be reduced. With this announcement, all the 29 Fidelity index funds and sector ETFs are now offered at lower expense ratios than their Vanguard counterparts. According to the senior vice president for Fidelity’s Investment Product Group, Colby Penzone, “index investors focused on cost” should look no “further than Fidelity.”

Moreover, in Kiplinger’s survey of several fund families, Fidelity became one of the Best Online Brokers. Additionally, in Kiplinger’s Personal Finance’s no-load fund list, four out of the 25 funds are from Fidelity. In the U.S. Lipper Fund Awards 2017, 11 Fidelity mutual funds received 14 awards. Out of the 11 Fidelity funds, five U.S. and non-U.S. equity funds received awards. Three sector funds, one bond fund and one high income fund also secured awards.

What Boosted Fidelity Fund’s Performance?

Fidelity invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments are made in technology. Among the cyclical sectors, the fund family invests the maximum in the financial sector, while among defensive sectors it invests heavily in healthcare.

Technology Select Sector SPDR (XLK) has climbed 25.4% so far this year and is the biggest gainer among the S&P 500 sectors. Also, the technology mutual fund has registered year-to-date (YTD) returns of 30.9%, according to Morningstar. Also, financial and healthcare mutual funds have registered positive YTD returns of 12.2% and 22.2%, respectively.

5 Fidelity Mutual Funds to Buy

Fidelity Investments is one of the largest and oldest mutual fund companies in the world. It serves more than 25 million individual customers. As of Jun 30, 2017, Fidelity had more than $2.4 trillion assets under management.

Here, we have selected five Fidelity mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) and are expected to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.

These funds have encouraging YTD return, and its minimum initial investment is within $5000. Also, these funds have low expense ratios.

Fidelity Select Technology FSPTX seeks capital growth over the long run. FSPTX invests a huge chunk of its assets in common stocks of companies primarily involved in production, development and sale of products used for technological advancement. The fund invests in both U.S. and non-U.S. companies. Factors including financial strength and economic condition are considered before investing in a company.

FSPTX has an annual expense ratio of 0.76%, which is below the category average of 1.44%. The fund has YTD return of 45.4%.

Fidelity Emerging Markets K FKEMX seeks growth of capital. FKEMX invests the lion’s share of its assets in equity securities of companies which have significant exposure to emerging markets and are based economically in emerging markets. FKEMX uses fundamental analysis of factors including financial position and economic condition. The fund allocates its assets in several emerging market countries.

FKEMX has an annual expense ratio of 0.83%, which is below the category average of 1.43%. The fund has YTD return of 39.5%.

Fidelity Select Biotechnology FBIOX invests the majority of its assets in common stocks of companies principally engaged in the research, development and distribution of various biotechnological products. FBIOX seeks appreciation of capital. The fund invests in both U.S. and non-U.S. companies. It analyzes the fundamental factors of companies before making investments.

FBIOX has an annual expense ratio of 0.74%, which is below the category average of 1.35%. The fund has YTD return of 26.7%.

Fidelity OTC K FOCKX invests a bulk of its assets in equity securities of companies, which are mainly traded on NASDAQ or the OTC market. As compared with the other markets, this OTC market includes more mid- and small-cap domestic and foreign companies. FOCKX seeks appreciation of capital. It is a non-diversified fund.

FOCKX has an annual expense ratio of 0.70%, which is below the category average of 1.22%. The fund has YTD return of 31.8%.

Fidelity Select Medical Equipment & Systems FSMEX invests the majority of its assets in securities of companies principally engaged in research, development, manufacture, distribution, supply, or sale of medical equipment and devices and related technologies. The fund seeks growth of capital by investing primarily in common stocks.

FSMEX has an annual expense ratio of 0.76%, which is below the category average of 1.35%. The fund has YTD return of 27.7%.

Want key mutual fund info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>