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3 Solid Funds to Buy on Soaring Semiconductor Sales
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The semiconductor industry has been performing well for quite some time now, thanks to soaring demand since the onset of the pandemic. Also, increased adoption of semiconductors in consumer electronics, automotive, industrial tools & equipment, and networking & communication goods is further likely to spur the demand for microchips.
However, rising demand has resulted in a supply crunch. The surge in demand, on the other hand, has been helping semiconductor manufacturers as sales have been skyrocketing. This resulted in a great 2021 for the semiconductor industry and this year too has started on an impressive note, with sales surging in the first three months of the year. Thus, funds like Fidelity Advisor Semiconductors Fund Class I (FELIX - Free Report) , Columbia Global Technology Growth Fund andFidelity Select Semiconductors Portfolio (FSELX - Free Report) are likely to benefit in the near term.
Semiconductor Sales Soaring
According to the recent report from the Semiconductor Industry Association (SIA), global semiconductor sales rose 32.4% year over year in February to $52.5 billion from $39.6 billion last year. Semiconductor sales jumped 3.4% on a month-over-month basis in February from January’s $50.7 billion.
February’s jump also marked the 11th straight month when sales grew more than 20% year over year.
Understandably, the industry is on a high with demand surging globally. The report also mentions that sales rose across all major regions of the world.
The demand for semiconductors has exploded in recent years. As more individuals stayed at home to work and learn during the COVID-19 pandemic, demand for electronic goods, networking, and communication equipment soared. This boosted semiconductor sales.
Also, the demand for microchips is expected to rise as the Internet of Things, artificial intelligence, and virtual reality gain traction. The development of these cutting-edge technologies is dependent on semiconductor technology. As a result, demand for semiconductors is only expected to rise in the coming years as the need for these services grows.
Soaring demand for semiconductors has resulted in a supply crunch. This has seen many companies pumping in billions of dollars to expand and ramp up production. The gap between demand and supply has somewhat narrowed but the crisis is far from over, and it is expected to last for the rest of the year. Given that demand will persist, this will only benefit the sector.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to semiconductor producers carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain from such factors. Moreover, these funds have encouraging three and five-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 Advisor Semiconductors Fund Class I seeks capital appreciation. FELIX invests primarily in common stocks. Fidelity Advisor Semiconductors Fund Class I normally invests at least 80% of its assets in securities of companies principally engaged in the design, manufacture, or sale of electronic components; equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Advisor Semiconductors Fund Class I has a track of positive total returns for over 10 years. Specifically, FELIX’s returns over the three and five-year benchmarks are 38.3% and 28.7%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FELIX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.77%, which is below the category average of 1.05%.
Columbia Global Technology Growth Fund seeks capital appreciation. CTYRX invests the majority of its assets in equities in technology firms that stand to benefit from technical advancements or developments. Columbia Global Technology Growth Fundinvests at least a fourth of the value of its net assets in securities of issuers whose primary business operations are in the technology and associated industries at the time of purchase.
Columbia Global Technology Growth Fund has a track of positive total returns for over 10 years. Specifically, CTYRX’s returns over the three and five-year benchmarks are 25.5% and 23.8%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
CTYRX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.97%, which is below the category average of 1.05%.
Fidelity Select Semiconductors Portfolio fund seeks capital appreciation. FSELX normally invests at least 80% of assets in common stocks of companies principally engaged in the design, manufacture, or sale of electronic components (semiconductors, connectors, printed circuit boards, and other components); equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Select Semiconductors Portfolio fund has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 38.8% and 29.2%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FSELX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.70%, which is below the category average of 1.05%.
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3 Solid Funds to Buy on Soaring Semiconductor Sales
The semiconductor industry has been performing well for quite some time now, thanks to soaring demand since the onset of the pandemic. Also, increased adoption of semiconductors in consumer electronics, automotive, industrial tools & equipment, and networking & communication goods is further likely to spur the demand for microchips.
However, rising demand has resulted in a supply crunch. The surge in demand, on the other hand, has been helping semiconductor manufacturers as sales have been skyrocketing. This resulted in a great 2021 for the semiconductor industry and this year too has started on an impressive note, with sales surging in the first three months of the year. Thus, funds like Fidelity Advisor Semiconductors Fund Class I (FELIX - Free Report) , Columbia Global Technology Growth Fund andFidelity Select Semiconductors Portfolio (FSELX - Free Report) are likely to benefit in the near term.
Semiconductor Sales Soaring
According to the recent report from the Semiconductor Industry Association (SIA), global semiconductor sales rose 32.4% year over year in February to $52.5 billion from $39.6 billion last year. Semiconductor sales jumped 3.4% on a month-over-month basis in February from January’s $50.7 billion.
February’s jump also marked the 11th straight month when sales grew more than 20% year over year.
Understandably, the industry is on a high with demand surging globally. The report also mentions that sales rose across all major regions of the world.
The demand for semiconductors has exploded in recent years. As more individuals stayed at home to work and learn during the COVID-19 pandemic, demand for electronic goods, networking, and communication equipment soared. This boosted semiconductor sales.
Also, the demand for microchips is expected to rise as the Internet of Things, artificial intelligence, and virtual reality gain traction. The development of these cutting-edge technologies is dependent on semiconductor technology. As a result, demand for semiconductors is only expected to rise in the coming years as the need for these services grows.
Soaring demand for semiconductors has resulted in a supply crunch. This has seen many companies pumping in billions of dollars to expand and ramp up production. The gap between demand and supply has somewhat narrowed but the crisis is far from over, and it is expected to last for the rest of the year. Given that demand will persist, this will only benefit the sector.
3 Best Choices
We have, thus, selected three mutual funds with significant exposure to semiconductor producers carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain from such factors. Moreover, these funds have encouraging three and five-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 Advisor Semiconductors Fund Class I seeks capital appreciation. FELIX invests primarily in common stocks. Fidelity Advisor Semiconductors Fund Class I normally invests at least 80% of its assets in securities of companies principally engaged in the design, manufacture, or sale of electronic components; equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Advisor Semiconductors Fund Class I has a track of positive total returns for over 10 years. Specifically, FELIX’s returns over the three and five-year benchmarks are 38.3% and 28.7%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FELIX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.77%, which is below the category average of 1.05%.
Columbia Global Technology Growth Fund seeks capital appreciation. CTYRX invests the majority of its assets in equities in technology firms that stand to benefit from technical advancements or developments. Columbia Global Technology Growth Fundinvests at least a fourth of the value of its net assets in securities of issuers whose primary business operations are in the technology and associated industries at the time of purchase.
Columbia Global Technology Growth Fund has a track of positive total returns for over 10 years. Specifically, CTYRX’s returns over the three and five-year benchmarks are 25.5% and 23.8%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
CTYRX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.97%, which is below the category average of 1.05%.
Fidelity Select Semiconductors Portfolio fund seeks capital appreciation. FSELX normally invests at least 80% of assets in common stocks of companies principally engaged in the design, manufacture, or sale of electronic components (semiconductors, connectors, printed circuit boards, and other components); equipment vendors to electronic component manufacturers; electronic component distributors; and electronic instruments and electronic systems vendors.
Fidelity Select Semiconductors Portfolio fund has a track of positive total returns for over 10 years. Specifically, FSELX’s returns over the three and five-year benchmarks are 38.8% and 29.2%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
FSELX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.70%, which is below the category average of 1.05%.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>