shopping

3 Funds to Tap the Holiday Season Shopping Rush

The coronavirus pandemic has made changes in the lifestyle and preferences of people. The U.S. economy is reopening in phases and social-distancing restrictions are being eased gradually. People are trying to do their daily work but with minimum human-to-human contact.

On the other hand, the holiday season is around the corner, and with events like Halloween, Thanksgiving, Cyber Monday, Black Friday and Christmas lined up during the late October-December period, retailers hold high hope to make business and recover from the coronavirus slump.

Per Deloitte’s annual holiday retail forecast, holiday retail sales are expected to increase between 1% and 1.5%, leading to sales between $1,147 billion and $1,152 billion during the November-January timeframe. The pandemic-led new normal trend has already boosted e-commerce this year, as matters of safety remains a prime concern, and will continue to boom as shoppers choose this medium for holiday shopping.

Deloitte forecasts that e-commerce sales will grow by 25% to 35%, year over year, during the 2020-2021 holiday season, and generate between $182 billion and $196 billion this season, compared to 14.7% e-commerce sales increase in 2019.

Additionally, decreasing unemployment, hopes of additional fiscal stimulus and scope of an effective coronavirus vaccine could boost spending this holiday season. Moreover, September’s consumer confidence jumped to 101.8, the biggest one-month jump in 17 years, definitely supports that spending in luxury, leisure goods, housing, new appliances and cars can edge up in the holiday season.

What’s more? Due to the pandemic several consumers had to cancel plans of travel and experiences and this slashed down costs can now be redirected on holiday gifts spending.

3 Top Fund Choices

Given the positive forecasts, we have selected three funds that can make the most in this holiday season. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds 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.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Fidelity Select Retailing Portfolio FSRPX fund aims for capital appreciation. This non-diversified fund invests the majority of its assets in securities of companies that merchandise finished goods and services to individual customers. FSRPX invests in both U.S. and non-U.S. stocks.

This Zacks Sector-Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSRPX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.74%, which is below the category average of 1.27%. The fund has returned 26.2% and 19.1% in the past three and five years, respectively.

Fidelity Select Leisure Portfolio FDLSX fund aims for capital appreciation. The fund invests at least 80% of its assets in companies that design, produce or distribute goods or services in the leisure industries. This non-diversified fund invests in both domestic and foreign stocks.

This Zacks Sector-Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.76%, which is below the category average of 1.27%. The fund has three and five-year returns of 8.9% and 9.7%, respectively.

Fidelity Select Consumer Discretionary Portfolio FSCPX fund aims for capital appreciation. This non-diversified fund invests the majority of its assets in common stocks of companies that manufacture and distribute consumer discretionary goods and services. FSCPX invests in both domestic and foreign stocks.

This Zacks Sector-Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSCPX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.76%, which is below the category average of 1.27%. The fund has three and five-year returns of 19.3% and 14.8%, respectively.

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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