These Fidelity funds still had the highest 10-year returns despite incurring losses in 2022.
With 322 mutual funds in their lineup, Fidelity offers investors a wide range of choices suitable for various objectives and risk tolerances. From straightforward, low-cost index funds to actively managed sector and thematic funds, Fidelity has it all. A popular way many investors screen potential fund picks is by historical performance, with the 10-year annualized return being a common metric. While past returns never guarantee future performance, this method can help investors assess how a fund performed during historical market conditions. It can also help investors get a sense of the potential volatility they have to cope with if they choose the fund. Here are eight of the best-performing Fidelity mutual funds on a 10-year annualized return basis.
Fidelity Select Retailing Portfolio (ticker: FSRPX)
FSRPX is an actively managed portfolio that targets the retail industry, which is part of the consumer cyclicals sector of the stock market. This industry has a “boom or bust” reputation and is highly sensitive and dependent upon favorable economic conditions for good returns. Top holdings in FSRPX include household names such as Amazon Inc. (AMZN), Home Depot Inc. (HD), Target Corp. (TGT) and Dollar General Corp. (DG). FSRPX was particularly hard-hit in 2022, with a loss — including dividends — of 29.4% due to inflationary pressures and recession fears. Despite these recent losses, the fund still has an annualized 10-year trailing return of 14.8%, beating the S&P 500’s return of 10.1%. FSRPX has a 0.7% expense ratio, meaning you’ll pay $70 per $10,000 invested annually.
Fidelity Select Health Care Portfolio (FSPHX)
Investors looking for a less-volatile sector fund can consider FSPHX, which invests in companies involved in the design, manufacture or sale of health care products and services. Notable top holdings in this fund include UnitedHealth Group Inc. (UNH), Eli Lilly and Co. (LLY) and Danaher Corp. (DHR). FSPHX suffered less than FSRPX in 2022, losing just 12.8%. Over the last 10 years, FSPHX has returned 14.9% annualized, beating both the S&P 500 and the MSCI U.S. IMI Health Care 25-50. This mutual fund is a rare example of an actively managed fund which has managed to outperform its benchmark over the longterm, even net of fees. FSPHX has an expense ratio of 0.68%.
Fidelity Select Health Care Services Portfolio (FSHCX)
The health care sector is fairly broad and can encompass companies involved in a wide variety of products and services. On the product side, this includes pharmaceuticals and equipment. On the services side, this includes hospitals, nursing homes and senior care facilities. Investors interested in the latter can buy FSHCX, which only invests in health care services companies. Its current top holding is UnitedHealth Group at 24.3%, with Cigna Corp. (CI) and Humana Inc. (HUM) coming in second and third. This approach has paid off, with FSHXC staying in the green with a 0.9% total return for 2022. Over the trailing 10 years, FSHCX has outperformed FSHPX slightly, with an annualized return of 15.3%. FSHCX has a 0.71% expense ratio.
Fidelity OTC Portfolio (FOCPX)
FOCPX is an actively managed fund that targets stocks listed on the Nasdaq exchange or those trading over the counter. The fund targets an allocation of at least 25% in technology sector stocks. As of Nov. 30, 2022, FOCPX allocated 42.2% of its investments to the technology sector, with communication services and consumer discretionary coming in second and third, respectively. The fund has a “large growth” tilt, with companies such as Apple Inc. (AAPL), Microsoft Corp. (MSFT), Amazon and Alphabet Inc. (GOOG, GOOGL) making up its top holdings. The fund lost 32.1% on a total return basis in 2022 due to the tech sector sell-off, but it has returned an annualized 16.1% over the last 10 years. FOCPX charges an expense ratio of 0.81%.
Fidelity Select Technology Portfolio (FSPTX)
Tech investors bullish on a sector comeback in 2023 can use FSPTX for targeted exposure. This actively managed fund selects stocks that either have or possess the potential to benefit significantly from technological advances and improvements. Once again, large-cap U.S. tech stocks such as Apple, Microsoft, Nvidia Corp. (NVDA) and Mastercard (MA) are in the top holdings. FSPTX also has a large-growth focus, with the majority of its holdings in the semiconductor, hardware and software industries. Like FOCPX, FSPTX also performed poorly last year, with a 36.9% loss on a total return basis. However, its 10-year annualized return sits at a slightly better 16.1%. FSPTX charges an expense ratio of 0.67%.
Fidelity Select Medical Technology and Devices Portfolio (FSMEX)
A great way to invest in the intersection of technology and health care is via FSMEX. This actively managed fund targets companies involved in the research, development, manufacture, distribution, supply or sale of medical equipment. Examples include eye care products, medical software, drug delivery systems, biotechnology and bionics. Notable top holdings in FSMEX include Thermo Fisher Scientific Inc. (TMO), Danaher Corp., Boston Scientific Corp. (BSX) and Insulet Corp. (PODD). Like FSPTX, FSMEX ended 2022 in the red with a 24.8% loss. However, it outperformed FSPTX over the last 10 years with an annualized return of 16.8%. FSMEX has an expense ratio of 0.68%.
Fidelity Select Software and IT Services Portfolio (FSCSX)
Tech investors wishing to drill down on a specific industry can hold FSCSX if they’re bullish on the software side. In recent years, themes like cybersecurity, e-commerce, big data, cloud computing and the metaverse have helped this industry reach new highs. Notable companies in FSCSX include Adobe Inc. (ADBE), Salesforce Inc. (CRM), AutoDesk Inc. (ADSK) and Palo Alto Networks Inc. (PANW). While FSCSX still ended the year with a loss of 29.1% due to rising rates and inflation, it wasn’t as bad as FSPTX because it lacked semiconductor stocks that were heavily affected by supply chain constraints. FSCSX charges an expense ratio of 0.67%.
Fidelity Select Semiconductors Portfolio (FSELX)
Demand for semiconductors rose sharply over the last decade due to the increased complexity of products from appliances to automobiles. From 2020 to 2021, the cryptocurrency bull market also helped semiconductor stocks soar due to demand for their products by cryptocurrency miners. Investors bullish on continued outperformance from the semiconductor industry can buy FSELX, which holds companies involved in the design, manufacture or sale of semiconductors and semiconductor equipment, such as graphic processing units. Top holdings in FSELX include Nvidia, Advanced Micro Devices Inc. (AMD), Taiwan Semiconductor Manufacturing Co. (TSM) and Broadcom Inc. (AVGO). FSELX fell hard last year by 35.2% due to supply chain constraints, high inflation and the crypto bear market, but it has returned an annualized 22.1% over the last 10 years. The fund has a 0.68% expense ratio.
8 top-performing Fidelity funds for retirement:
— Fidelity Select Retailing Portfolio (FSRPX)
— Fidelity Select Health Care Portfolio (FSPHX)
— Fidelity Select Health Care Services Portfolio (FSHCX)
— Fidelity OTC Portfolio (FOCPX)
— Fidelity Select Technology Portfolio (FSPTX)
— Fidelity Select Medical Technology and Devices Portfolio (FSMEX)
— Fidelity Select Software and IT Services Portfolio (FSCSX)
— Fidelity Select Semiconductors Portfolio (FSELX)
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8 Top-Performing Fidelity Funds for Retirement originally appeared on usnews.com
Update 01/05/23: This story was previously published at an earlier date and has been updated with new information.
