These top-performing Fidelity funds provide insight into a volatile market.
The best approach to retirement investing is typically to ignore short-term market fluctuations and focus on the long term. However, monitoring the top-performing Fidelity mutual funds can give investors a snapshot of market trends. So far in 2022, fears over rising interest rates, persistently high inflation and the war in Ukraine have rattled the S&P 500. A look at which Fidelity mutual funds are performing best in these unusual conditions can help retirement investors understand which investments may outperform in 2022 and beyond. Here are the eight best-performing Fidelity mutual funds over the past 12 months, as of April 14.
Fidelity Select Energy Portfolio (ticker: FSENX)
The FSENX fund provides exposure primarily to energy sector companies. Its holdings include legacy oil, gas and coal companies as well as cleaner nuclear, geothermal and renewable energy companies. It’s no surprise that Fidelity’s FSENX fund is its best-performing mutual fund of the past 12 months. Oil and gas prices were elevated even before Russia invaded Ukraine, and global sanctions on Russia further pressured energy prices. The fund has significantly lagged the S&P 500 over the past decade, but it could be a great bet for investors who believe high oil and gas prices are here to stay. The FSENX fund’s top holdings include Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and ConocoPhillips (COP).
1-year return: 71.1%
Expense ratio: 0.85%
Fidelity Natural Resources Fund (FNARX)
The FNARX fund provides exposure to companies that own or develop natural resources and companies that supply goods and services to natural resource developers. In an elevated inflationary environment, natural resources prices have been on the rise, and the FNARX fund provides diversification for investors outside of the energy sector. In addition to oil and gas stocks, the fund invests in companies that produce resources such as gold, copper and paper packaging. The fund is heavily weighted to North America, with 94% of its holdings operating in the U.S. or Canada. Top fund holdings include Exxon Mobil, Canadian Natural Resources Ltd. (CNQ) and Freeport-McMoRan Inc. (FCX).
1-year return: 58.9%
Expense ratio: 0.89%
Fidelity Global Commodity Stock Fund (FFGCX)
The FFGCX fund invests at least 80% of its assets in companies that are engaged in the global commodities market, including companies in the energy, metals and agriculture businesses. Commodity prices have been soaring due to both supply shortages and inflation. The FFGCX has outperformed both the Fidelity FSENX mutual fund and the Fidelity FNARX fund over the past 10 years, generating an average annual return of 5.5%. Investors who are skeptical that the Federal Reserve can rein in inflation anytime soon can bet on higher commodity prices with the FFGCX fund. Top holdings include fertilizer company Nutrien Ltd. (NTR), Chevron and Exxon Mobil.
1-year return: 45.4%
Expense ratio: 0.94%
Fidelity Select Semiconductors Portfolio (FSELX)
The global semiconductor industry has been battling supply shortages since the COVID-19 pandemic began in 2020. Despite the challenges, the FSELX fund has been a top performer among Fidelity mutual funds in the past year. As its name suggests, the FSELX fund invests primarily in companies that design, manufacture or sell semiconductor chips or semiconductor components. Global semiconductor demand has been booming for years. Advanced technological challenges such as cloud services, mobile internet, autonomous vehicles and artificial intelligence will drive demand for semiconductor processing power for the foreseeable future. Top FSELX fund holdings include Nvidia Corp. (NVDA), Marvell Technology Inc. (MRVL) and Microchip Technology Inc. (MCHP).
1-year return: 27.4%
Expense ratio: 0.70%
Fidelity Select Insurance Portfolio (FSPCX)
The FSPCX mutual fund invests primarily in companies that specialize in underwriting, reinsuring, selling, distributing or placing property and casualty, life, or health insurance. The insurance industry isn’t the most exciting subsector of the market, but the track record of the FSPCX speaks for itself. The fund has generated an 11.4% average annual return since its inception way back in 1985. Insurance companies benefit from higher interest rates because their debt holdings earn more cash flow as interest rates rise. Top holdings for the FSPCX fund include Marsh & McLennan Cos. Inc. (MMC), Travelers Cos. Inc. (TRV) and Chubb Ltd. (CB).
1-year return: 25.7%
Expense ratio: 0.83%
Fidelity Real Estate Investment Portfolio (FRESX)
Investing in real estate is a great way for investors to hedge their portfolios in a stagflationary environment. Economists see a growing risk of stagflation now that the Federal Reserve has begun raising interest rates. The FRESX fund invests in real estate stocks, and a large percentage of its holdings are real estate investment trusts, or REITs. The real estate sector was a top-performing sector of the market during the last extended period of stagflation in the 1970s, and investors buying the FRESX fund appear to be betting on a repeat performance. The FRESX fund’s top holdings include Crown Castle International Corp. (CCI), SBA Communications Corp. (SBAC) and Prologis Inc. (PLD).
1-year return: 24.4%
Expense ratio: 0.73%
Fidelity Canada Fund (FICDX)
As its name implies, the FICDX fund invests in Canadian companies and other assets tied to the Canadian economy. In the U.S. market, the information technology sector and the health care sector together make up more than 40% of the S&P 500’s weighting. In Canada, the financial sector and the energy sector dominate the economy and the FICDX fund, accounting for a combined 45% of the fund’s portfolio weight. The energy sector has been on fire in the past year, which has helped fuel the FICDX fund’s outperformance. Its top holdings include Toronto-Dominion Bank (TD), Royal Bank of Canada (RY) and Canadian Pacific Railway Ltd. (CP).
1-year return: 23.4%
Expense ratio: 0.80%
Fidelity Agricultural Productivity Fund (FARMX)
The FARMX fund invests in agricultural productivity companies, which include direct crop producers and companies that help increase agricultural yields and food production. Inflation was driving agricultural commodity prices higher even before Russia invaded Ukraine, but prices of certain crops and agricultural resources have skyrocketed since the war began. Russia and Ukraine account for about 30% of the world’s wheat exports and 20% of the world’s corn exports. Russia is also a major global supplier of potash, ammonia, urea and monoammonium phosphate, all key resources used in fertilizers. The FARMX fund’s top holdings include Deere & Co. (DE), Nutrien and Corteva Inc. (CTVA).
1-year return: 23.3%
Expense ratio: 1%
8 top-performing Fidelity funds for retirement:
— Fidelity Select Energy Portfolio (FSENX)
— Fidelity Natural Resources Fund (FNARX)
— Fidelity Global Commodity Stock Fund (FFGCX)
— Fidelity Select Semiconductors Portfolio (FSELX)
— Fidelity Select Insurance Portfolio (FSPCX)
— Fidelity Real Estate Investment Portfolio (FRESX)
— Fidelity Canada Fund (FICDX)
— Fidelity Agricultural Productivity Fund (FARMX)
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Update 04/18/22: This story was published at an earlier date and has been updated with new information.