Fidelity Investments is one of the largest and oldest mutual fund companies in the world. Recently, Fidelity mutual funds got more attention from investors looking for stable returns. After all, Fidelity offers a variety of investment options, from sector-based funds to key actively managed funds. The company provides investment advice, discount brokerage services, retirement services, wealth management services, securities execution, and clearance and life insurance products to clients.

At Fidelity, a large group of investment professionals carry out extensive and in-depth research to provide potential investment avenues worldwide to their investors. To top it, low expenses, effective fund management and the ability to survive market volatility have resulted in strong fund performance.

Fidelity’s Recent Performance

By the end of the third quarter, Fidelity Investments had more than $1.9 trillion of assets under management. The initial investment of the majority of Fidelity mutual funds ranges from $0 to $2,500. As of Nov 29, 2019, out of the total number of funds under Fidelity, only 3.2% were load funds, while the remaining 96.8% were no load funds.

Further, Fidelity Advisor Growth Opportunities Fund Class M (FAGOX - Free Report) turned out to be one of the best-performing mutual funds from the Fidelity family. The fund posted solid gains in the year-to-date period. FAGOX, which invests a bulk of its assets in common stocks of companies with above-average growth potential, has returned 26.1% over the past three years.

What Contributed to Fidelity’s Gains?

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

Technology Select Sector SPDR (XLK) climbed 42.7% in the YTD period and has remained the best-performing sector so far this year among the 11 S&P 500 sectors.

4 Best Funds to Buy Now

Given the circumstances, we have highlighted four Fidelity mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain from the above-mentioned factors. Moreover, these funds have encouraging three-year and YTD 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 their money in mutual funds.

Fidelity Select Software & IT Services Portfolio (FSCSX - Free Report) fund invests the majority of its assets in companies whose primary operations are related to software or information-based services. It primarily focuses on acquiring common stocks of both domestic and foreign companies. 

This Sector - Tech product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three-year and YTD benchmarks are 22.1% and 29.1%, respectively.

The fund carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.72%, which is below the category average of 1.30%.

Fidelity Select Consumer Finance Portfolio (FSVLX - Free Report) fund seeks appreciation of capital. FSVLX invests more than 80% of its assets in equity securities of companies involved in offering products and services related to consumer finance. The fund considers financial strength and economic conditions before investing in a company. FSVLX invests in both U.S.-based and well as non-U.S.-based companies.

This Zacks sector – Finance product has a history of positive total returns for more than 10 years.

FSVLX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.87%, which is below the category average of 1.41%. The fund has three-year and YTD returns of 16.3% and 28.2%, respectively.

Fidelity Select Medical Technology And Devices Portfolio (FSMEX - Free Report) fund invests a large portion of its assets in securities of companies engaged in the manufacturing and distribution of medical devices and equipment. The fund invests in both U.S. and non-U.S. stocks.

This Zacks sector – Health product has a history of positive total returns for more than 10 years.

FSMEX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73%, which is below the category average of 1.27%. The fund has three-year and YTD returns of 19.3% and 19.1%, respectively.

Fidelity Select Semiconductors Portfolio (FSELX - Free Report) fund invests the bulk of its assets in common stocks of companies involved in the manufacture, design, and sale of electronic equipment and components. FSELX seeks growth of capital. The fund invests in both U.S. and non-U.S. companies.

This Sector - Tech product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three-year and YTD benchmarks are 22.9% and 45.1%, respectively.

The fund carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.73%, below the category average of 1.30%.