4 Funds to Make the Best of November's Hearty Job Additions

Per the latest report by the Bureau of Labor Statistics, the U.S. economy added a staggering number of new jobs in November. The metric also surpassed estimates as vacancies were created in almost all major sectors of the economy. Moreover, the unemployment rate fell to an even lower level in the month, with wages improving at a decent pace.

Such a blockbuster jobs report calls for investing in mutual funds with exposure to sectors that created the maximum number of new job vacancies.

November’s Job Additions Best Since January 2019

According to the report, nonfarm payrolls in November surged by 266,000, boosted by a rise in new job additions in the healthcare sector as well as the return of General Motors’ workers after a long strike. November’s job additions exceeded analysts’ estimates of around 187,000.

In fact, the end of the General Motors strike had a prominent role to play in the manufacturing sector’s 54,000 new vacancies last month.

November’s job additions were also the best since January’s 312,000 new jobs and significantly higher than November 2018’s total of 196,000. New jobs were added across a wide range of sectors last month, with manufacturing leading the lot. After manufacturing, healthcare, and leisure and hospitality saw the highest number of job additions of 45,000 each.

Employment in the financial services sector also improved in November (+13,000), with an addition of 7,000 jobs in credit intermediation and related activities. The sector has added 116,000 jobs over the past one year. Transportation and warehousing also continued their upward movement, by creating 16,000 new opportunities.

Apart from the impressive new roles added across sectors, average hourly earnings increased by 3.1% from a year ago while the unemployment rate dropped from October’s 3.6% to 3.5% last month.

4 Fund Picks

We have, therefore, selected four mutual funds from sectors that added the highest number of jobs in November. All these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging year-to-date returns. Additionally, the minimum initial investment is within $5,000.

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 Select Health Care Services Portfolio FSHCX seeks capital growth. The fund invests the majority of its assets in securities of companies primarily engaged in activities in the health care sector. FSHCX mostly invests in common stocks.

This Zacks sector – Health product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSHCX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.76%, which is below the category average of 1.27%. It has returned 4.1% on a year-to-date basis. FSHCX has no minimum initial investment.

T. Rowe Price Financial Services Fund PRISX aims for long-term capital appreciation and a decent level of income. The fund invests the majority of its assets in the common stocks of companies in the financial services industry. PRISX may also invest in companies that generate at least half of their revenues from conducting business with the financial services industry.

This Zacks sector – Finance product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

PRISX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.87%, which is below the category average of 1.41%. It has returned 22.8% on a year-to-date basis. PRISX has a minimum initial investment of $2500.

Fidelity Select Leisure Portfolio FDLSX aims for capital appreciation. The fund invests the majority of its assets in companies that design, produce or distribute goods or services in the leisure industries. FDLSX mostly invests in common stocks.

This Zacks sector – Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FDLSX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.76%, which is below the category average of 1.26%. It has returned 20% on a year-to-date basis. FDLSX has no minimum initial investment.

Fidelity Select Industrials Portfolio FCYIX seeks capital growth. The fund invests the majority of its assets in companies engaged in the research, development, manufacture, distribution, supply or sale of industrial products, services or equipment. FCYIX mostly invests in common stocks.

This Zacks sector – Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FCYIX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.76%, which is below the category average of 1.20%. It has returned 20.7% on a year-to-date basis. FCYIX has no minimum initial investment.

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Click to get this free report Get Your Free (PRISX): Fund Analysis Report Get Your Free (FCYIX): Fund Analysis Report Get Your Free (FDLSX): Fund Analysis Report Get Your Free (FSHCX): Fund Analysis Report To read this article on Zacks.com click here.