Join        Login             Stock Quote

A Six-Pack Of Commodity-Based Funds

 March 15, 2011 02:30 PM

by Jim Lowell, editor Fidelity Investor

The last time I focused on commodities was back in 2009 when the recovery was piecing itself together. Now, most of the pieces of the recovery are in place, with the notable misfits being job creation and home values.

Here's a look at six of Fidelity's commodity and resource related funds that earn my buy recommendation.

Today, commodities are in increasingly short supply as increasing global consumer demand, geopolitical disruptions, and even Mother Nature have taken their toll on the supply of goods and services.

I view commodities as a real world currency whose value typically increases in times of economic expansion and decreases in times of economic contraction.

Commodities are lighting up the screen and blinking an early warning on inflation.

Commodities and the companies that profit from sowing, nurturing, harvesting, processing and shipping them, have been on a better run than the broader market averages, leading many to suggest they're overpriced and overdue for a pullback.

Fidelity Canada (FICDX):

Manager Doug Lober invests in Canadian companies or those tied to Canada economically.

This fund is a natural resources play which trends up in recovery cycles and even during boom times as demand for natural resources that feed the economic growth engines increases.

The top three sectors are materials (28.4%), energy (23.1%), and financials (20.5%). If I could buy only one commodity-related fund, this would be my current preference.

Fidelity Energy Service (FSESX):

As prices rise, more and more drilling ensues … and I like owning the store that sells the prospectors their picks and shovels, making a profit no matter if they find black gold in them thar hills or not.

Manager Jonathan Kasen invests in companies that provide products and services for engineering and construction of on- and offshore drilling, reservoir analysis, exploration, technology, and production and well services.

Foreign investments make up 19.4% of the holdings. Top holdings are Schlumberger, Halliburton, Baker Hughes, and National Oilwell varco.

Fidelity Global Commodity Stock (FFGCX):

I am upgrading my recommendation on this fund, based on the long-term trajectory of increased demand.

Manager Joe Wickwire owns companies that seed, sow, nurture, harvest, process and transport a broad based basket of commodities.

The top five country representations are the US (30.5%), the UK (17.7%), Canada (16.2%), Brazil (4.8%), and Japan (3.8%).

The top three sectors are materials (57.3%), energy (33.1%), and consumer staples (4.2%).

Next Page >>12


Comments Closed

rss feed

Latest Stories

article imageTackling China's Debt Problem: Can Debt-Equity Conversions Help?

China’s high and rising corporate debt problem and how best to address it has received much attention read on...

article imageWill Job Growth Kill The Bear-Market Signal For Stocks?

It’s all about jobs now. Actually, it’s always been about jobs. But the stakes are even higher—perhaps more read on...

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

Popular Articles

Daily Sector Scan
Partner Center

Related Articles:

Automating Ourselves To Unemployment
More Articles on: Finance

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.