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Best And Worst Q2’16: Industrials ETFs, Mutual Funds And Key Holdings

The Industrials sector ranks first out of the ten sectors as detailed in our Q2’16 Sector Ratings for ETFs and Mutual Funds report. Last quarter , the Industrials sector ranked second. It gets our Neutral rating, which is based on aggregation of ratings of 20 ETFs and 17 mutual funds in the Industrials sector. See a recap of our Q1’16 Sector Ratings here . Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the sector. Not all Industrials sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 20 to 343). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Industrials sector should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings U.S. Global Jets ETF (NYSEARCA: JETS ) and EcoLogical Strategy ETF (NYSEARCA: HECO ), and Guggenheim S&P 500 Equal Weight Industrials (NYSEARCA: RGI ) are excluded from Figure 1 because their total net assets are below $100 million and do not meet our liquidity minimums. Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Five mutual funds are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums. iShares US Industrials ETF (NYSEARCA: IYJ ) is the top-rated Industrials ETF and Fidelity Select Transportation Portfolio (MUTF: FSRFX ) is the top-rated Industrials mutual fund. IYJ earns a Very Attractive rating and FSRFX earns an Attractive rating. Market Vectors Environmental Services ETF (NYSEARCA: EVX ) is the worst rated Industrials ETF and ICON Industrials Fund (MUTF: ICIAX ) is the worst rated Industrials mutual fund. Both earn a Dangerous rating. 403 stocks of the 3000+ we cover are classified as Industrials stocks. JetBlue Airways (NASDAQ: JBLU ) is one of our favorite stocks held by FSRFX and earns an Attractive rating. Over the past decade, JetBlue has grown after-tax profit ( NOPAT ) by an impressive 30% compounded annually. The company has improved its return on invested capital ( ROIC ) from 2% in 2005 to 11% in 2015. The company has also quadrupled its NOPAT margin from 3% to 12% over this same timeframe. Despite the strong fundamentals, JBLU is undervalued. At its current price of $21/share, JBLU has a price-to-economic book value ( PEBV ) ratio of 1.0. This ratio means that the market expects JetBlue’s NOPAT to never increase from current levels. If JetBlue can grow NOPAT by just 12% compounded annually for the next decade , the stock is worth $47/share today – a 123% upside. Clean Harbors (NYSE: CLH ) is one of our least favorite stocks held by ICIAX and earns a Very Dangerous rating. Over the past five years, Clean Harbors’ NOPAT has declined by 1% compounded annually. Its ROIC has fallen from a once impressive 13% in 2010 to a bottom-quintile 4% in 2015. However, in a disconnect with the business fundamentals, the stock is up 26% over the past three months and shares are largely overvalued. To justify its current price of $50/share, CLH must grow NOPAT by 13% compounded annually for the next 18 years . Such lofty expectations make it clear why CLH in on this month’s most dangerous stocks list and should be avoided. Figures 3 and 4 show the rating landscape of all Industrials ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst ETFs Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Mutual Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

3 Strong Buy Large-Cap Value Mutual Funds

Investors interested in comparatively safer returns from stocks available at discounted prices may consider large-cap value mutual funds. While large-cap funds usually provide a safer option than small- or mid-cap funds, mutual funds investing in value stocks have the potential to deliver higher returns and exhibit lower volatility than their growth and blend counterparts. Large-cap funds generally invest in securities of companies with market capitalization of more than $10 billion. These funds have exposure to large-cap stocks that are expected to provide long-term performance history and assure more stability than what mid or small caps offer. Value funds, on the other hand, generally invest in stocks that tend to trade at a price lower than their fundamentals (i.e., earnings, book value and debt-to-equity) and pay out dividends. Value stocks are expected to outperform the growth ones across all asset classes when considered on a long-term investment horizon, and are less susceptible to trending markets. Below, we share with you three top-rated, large-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all large-cap value mutual funds, investors can click here . Vanguard U.S. Value Fund Inv (MUTF: VUVLX ) seeks long-term capital growth and high income. It invests all of its assets in undervalued companies having low price/earnings (P/E) ratios. VUVLX focuses on acquiring stocks of large and mid-cap companies having impressive growth potential and favorable valuations. The fund has a three-year annualized return of 9.3%. VUVLX has an expense ratio of 0.26%, compared with the category average of 1.1%. MFS Value Fund A (MUTF: MEIAX ) generally invests in equity securities, including common stocks, securities of REITs and convertible securities. Though it primarily invests in value companies having large capitalization, it may also invest in small and mid-cap companies. The fund has a three-year annualized return of 10.1%. As of March 2016, MEIAX held 100 issues, with 4.13% of its assets invested in JPMorgan Chase & Co. (NYSE: JPM ). Commerce Value Fund No Load (MUTF: CFVLX ) seeks capital appreciation. It invests a minimum of 65% of its assets in common stocks. Its investments include companies with an impressive earnings growth track record that are believed to pay out dividends. CFVLX may invest a notable portion of its assets in securities of companies from the financial sector. The fund has a three-year annualized return of 9.5%. CFVLX has an expense ratio of 0.70%, compared with the category average of 1.1%. Original Post

4 Best-Rated Fidelity Mutual Funds To Invest In

Fidelity Investments is one of the largest and oldest mutual fund companies in the world. The company serves nearly 25 million individual customers. As of December 31, 2015, it had total assets of $5.15 trillion, with $2.04 trillion under management. Fidelity Investments carries out operations in the U.S. through 10 regional offices and over 180 Investor Centers. It also has its presence in eight other countries of North America, Europe, Asia and Australia. The company provides investment advice, discount brokerage services, retirement services, wealth management services, securities execution and clearance and life insurance products to its clients. At Fidelity, a large group of investment professionals carry out extensive and in-depth research on potential investment avenues worldwide. Below, we share with you four top-ranked Fidelity mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all Fidelity mutual funds, investors can click here . Fidelity Select Telecommunications Portfolio No Load (MUTF: FSTCX ) invests the majority of its assets in securities of companies primarily involved in the manufacture and sale of communications services or communications equipment. It invests in both domestic and foreign issuers. Factors including financial condition and industry position, as well as market and economic conditions are considered before investing in a company. The fund is non-diversified and has a three-year annualized return of 7.5%. As of March 2016, FSTCX held 51 issues, with 22.18% of its assets invested in AT&T Inc. (NYSE: T ). Fidelity Select Retailing Portfolio No Load (MUTF: FSRPX ) seeks growth of capital. It invests a large chunk of its assets in securities of firms involved in merchandising finished goods and services to consumers. FSRPX focuses on acquiring common stocks of companies throughout the globe. Factors including financial strength and economic condition are considered before investing in a company. The fund has a three-year annualized return of 18.3%. Deena Friedman has been the fund manager of FSRPX since 2014. Fidelity Select Software & IT Services Portfolio No Load (MUTF: FSCSX ) invests a major portion 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. FSCSX uses fundamental analysis to select companies for investment purposes. It has a three-year annualized return of 15.9%. FSCSX has an expense ratio of 0.76%, as compared to a category average of 1.45%. Fidelity International Small Cap Opportunities Fund No Load (MUTF: FSCOX ) seeks capital appreciation. It invests the majority of its assets in small-cap companies located outside the U.S., including those from emerging countries. FSCOX emphasizes investing in common stocks of companies with market capitalization below $5 billion. The fund invests in securities issued in different countries. It has a three-year annualized return of 6.2%. Jed Weiss has been the fund manager of FSCOX since 2008. Original Post