4 Stay-at-Home Funds to Continue Gaining Amid JNJ Vaccine Halt

The U.S. economy’s progress depends highly on progress in the vaccination front. Pfizer-BioNTech and Moderna’s two-shot vaccine still holds the majority of the 192 million shots that have been so far administered to Americans, 7.5 million have received Johnson & Johnson’s one-shot vaccine. However, as of Apr 12, six women out of 1.5 million vaccinated with JNJ’s shots between the ages of 18 and 48 have rare and severe type of blood clots and have developed symptoms, most often headaches, six to 13 days after vaccination.

Hence, Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) rerecommended an immediate halt on the JNJ vaccine. Notably, JNJ’s vaccine played a significant role in the vaccination progress in America as this single-shot vaccine could remain on the shelf for at least a week and is 66% effective in preventing cases of moderate-to-severe illness and 85% effective against severe cases of COVID-19. A federal vaccine advisory committee that is currently overseeing the investigation wanted more data before deciding whether to resume use and CDC agreed to reassemble within 10 days as the vaccine plays a prime role in the battle against the pandemic.

While the government and pharmaceuticals continue to do their part in making rapid progress in vaccination, the virus has continued mutation and has emerged in several variants across the globe. These fast-spreading coronavirus variants create a challenge for business, schools and the economy as a whole. Investors who were earlier moving out of technology stocks or funds and investing in cyclicals are now moving back to stay-at-home players given the vaccine setbacks dampening economic growth.

4 Fund Picks

Given the current scenario, we have shortlisted four mutual funds that have significant exposure to companies benefiting from the stay-at-home practices and carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform their peers in the future.

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).

Franklin DynaTech Fund Class A FKDNX aims for capital appreciation. The fund invests primarily in common stocks and the fund manager focuses on companies that are leaders in innovation, take advantage of new technologies, have superior management, and benefit from new industry conditions.

This Sector-Tech product has a history of positive total returns for over 10 years.  Specifically, FKDNX has returned about 26% over the past three- and five-year period. To see how this fund performed compared in its category, and other #1 and #2 Ranked Mutual Funds, please click here.

FKDNX has an annual expense ratio of 0.85% versus the category average of 1.04%. Some of the fund’s stay-at-home players are Shopify, ServiceNow, DocuSign, Delivery Hero and Pinterest.

Fidelity Select Technology Portfolio FSPTX fund aims for capital appreciation. It invests primarily in equity securities, especially common stocks of companies that are engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, this non-diversified has returned 29.8% and 31.3% in the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSPTX has an annual expense ratio of 0.71% versus the category average of 1.24%. Some of the fund’s stay-at-home players are Microsoft, Salesforce, Applied Materials and Cloudflare.

Fidelity Select Software & IT Services Portfolio FSCSX aims for capital appreciation. The non-diversified fund invests majority of its assets in common stocks of companies engaged in research, design, production or distribution of products or processes that relate to software or information-based services. Some of the cybersecurity companies in this fund’s holding are Palo Alto Networks and FireEye.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, FSCSX has three and five-year returns of 26.6% and 26.8%, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSCSX has an annual expense ratio of 0.71% versus the category average of 1.24%. Some of the fund’s stay-at-home players are Workday, Electronic Arts, Activision Blizzard, Proofpoint, Dropbox and Smartsheet.

Fidelity Select Semiconductors Portfolio FSELX fund aims for capital appreciation. The non-diversified fund invests majority of assets in securities of companies, principally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment.

This Zacks sector – Tech fund has a history of positive total returns for more than 10 years. Specifically, FSELX has three and five-year annualized return of 30.1% and 32.5%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSELX has an annual expense ratio of 0.72% versus the category average of 1.24%. Some of the fund’s stay-at-home players are NVIDIA, QUALCOMM, Intel and Micron Technology.

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