Investment themes to play by 2022: 4 fund choices

The year 2021 has been a roller coaster ride, with the pandemic still disrupting economies, leading to supply chain bottlenecks, labor shortages and stagflation. Investors had to look for better investment vehicles as low interest rates made traditional avenues less attractive. However, 2021 was more prone to the macro theme of reopening the global economy, while 2022 will continue to add to it. Indeed, with the Delta and Omicron variants still wreaking havoc and pushing the administration to enforce restrictions, record inflation, supply chain obstacles and labor shortages may impact growth. of the economic and financial market.

Let’s discuss three themes by 2022 that investors are choosing for the year ahead. When investors review these themes, they can choose the following mutual funds: Fidelity Select Biotechnology Wallet FBIOX, Calvert Equity Fund, Class A CSIEX, New Class A alternative funds NALFX and Parnassus Mid Cap Growth Fund – Investor PARNX.

The first theme on which we can stay focused for next year is the clean energy transition. President Joe Biden’s plan to bring America to zero net greenhouse gas emissions by 2050 at the latest will promote renewables, battery technology and more. Biden’s plan calls for 100% of the federal government’s electricity to be produced in carbon-free means by 2030. Also by 2035, all new vehicles purchased will have to be emission cars and trucks. zero carbon.

Then the boom in the biotechnology space will continue due to the ongoing pandemic which is stimulating research into vaccines and treatments and other branches like gene therapy and gene editing to fight cancer and d ‘other chronic diseases. By a Grand View search report, the global biotechnology market was valued at $ 752.88 billion in 2020 and is expected to experience a CAGR of 15.83% from 2021 to 2028. In fact, government initiatives to modernize the regulatory pathway for drugs and standardize clinical studies, and the growing demand for orphan drugs and personalized medicine will continue to energize this space.

Finally, impact investing, which had a global market valued at $ 255.1 billion in 2020, by Research and Markets The data, will reach $ 791.2 billion by 2027, at a CAGR of 17.6%. The pandemic has helped investors focus more on socially responsible impact investing, helping environmental, social and governance (ESG) funds to rise in importance. Impact investment stocks have outperformed the broader market over the past year and have aggregate assets under management of $ 4 trillion. Impact investing is not limited to environmental or climate concerns either. The impact of businesses on the surrounding community, their role in the development of said community and the creation of a better value chain for society are the other social causes on which it focuses.

4 funds to buy

With a strong outlook for 2022, we have shortlisted four mutual funds that have a significant investment in the aforementioned themes and that have a Zacks Mutual Fund Rank # 1 (Strong Buy) or 2 (Buy). In addition, these funds have shown encouraging returns since the start of the year. In addition, the minimum initial investment is $ 5,000. We expect these funds to outperform their peers in the future.

The question here is: why should investors consider mutual funds? The low transaction costs and portfolio diversification without multiple commission fees associated with stock purchases are the main reason for putting money into mutual funds (read more: Mutual Funds: Pros, Cons, and How They Make Money For Investors).

Fidelity Select Biotechnology Wallet The fund aims for capital appreciation. This non-diversified fund invests most of the net assets in common stocks of companies primarily engaged in the research, development and distribution of biotechnology products.

This Zacks – Health Product segment has had a history of positive total returns for over 10 years. Specifically, the fund has generated a return of 13.7% and 12.4% over the past three and five years, respectively. To see how this fund performs against its category and against other classified 1 and 2 mutual funds, please click here.

Fidelity Select Biotechnology Portfolio, a Zacks Mutual Fund Rank # 1, has an annual expense ratio of 0.70%, below the category average of 1.03%.

Calvert Equity Fund, Class A seeks capital growth by investing in stocks that are believed to offer opportunities for potential capital appreciation. The fund invests most of the assets in common stocks of companies that are among the top 1,000 listed companies in the United States.

This Zacks Large Cap Growth product has a history of positive total returns for over 10 years. Specifically, Class A of Calvert Equity Fund has three- and five-year returns of 24.5% and 22.4%, respectively. To see how this fund has performed against its category and other classified 1 and 2 mutual funds, please click here.

Calvert Equity Fund Class A has a Zacks Mutual Fund Rank # 1 and an annual expense ratio of 0.94% compared to the category average of 0.99%.

New Class A alternative funds seeks long-term capital growth with income as a secondary objective. It invests primarily in common stocks of companies and even other equity securities, such as real estate investment trusts and US certificates of deposit.

This Zacks – Other Product segment has had a history of positive total returns for over 10 years. Specifically, NALFX has three- and five-year returns of 27.6% and 20.4%, respectively. To see how this fund has performed against its category and other classified 1 and 2 mutual funds, please click here.

New Alternatives Fund Class A has a Zacks Mutual Fund Rank # 2 and an annual expense ratio of 0.96% compared to the category average of 1.26%.

Parnassus Mid Cap Growth Fund – Investor targets capital appreciation. The fund invests the majority of its assets in mid-sized growth companies.

This Zacks – Large Cap Value sector has a history of positive total returns for over 10 years. Specifically, the Parnassus Mid Cap Growth Fund – Investor generated a return of 16.2% and 13.7% for the three and five year periods, respectively. To see how this fund has performed against its category and other classified 1 and 2 mutual funds, please click here.

Parnassus Mid Cap Growth Fund – Investor has a Zacks Mutual Fund Rank # 2 and annual expense ratio of 0.83%, below the category average of 1.09%.

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