In recent times, the transportation sector has benefited immensely from the weakness in oil prices, since oil costs form one of the major input costs for the majority of transportation companies. The sector comprises players from multiple fields including airline companies, truckers, shipping companies and railroads. The sector is expected to continue its healthy performance this year on an improving U.S. economy and low fuel costs. In this favorable scenario, mutual funds having significant exposure to this sector are likely to gain from the impressive performance of this sector.
Below we will share with you 3 potential transportation mutual funds. Each has earned either a Zacks #1 Rank (Strong Buy) or a Zacks #2 Rank (Buy) as we expect the fund to outperform its peers in the future.
Fidelity Select Transportation (MUTF:FSRFX) seeks capital growth over the long run. FSRFX invests a lion's share of its assets in companies that provide transportation services or are primarily involved in producing, designing and distribution of transportation equipments. Factors including financial strength and economic condition are considered for investing in stocks of companies throughout the globe. Fidelity Select Transportation is a non-diversified fund and has returned 19.1% over the past one year.
Matthew Moulis is the fund manager and has managed FSRFX since 2012.
Rydex Transportation Investor (MUTF:RYPIX) invests a large chunk of its assets in domestically-traded companies from transportation sector and in other securities including futures contracts and options. RYPIX may allocate a notable portion of its assets in companies having market capitalizations within the range of small to medium size. RYPIX may also invest in ADRs in order to gain exposure to non-US companies and may also invest in U.S. government securities. Rydex Transportation Investor is a non-diversified fund and has returned 17.1% over the past one year.
As of March 2015, RYPIX held 70 issues with 4.55% of its assets invested in Union Pacific Corp.
Fidelity Select Air Transportation Portfolio (MUTF:FSAIX) seeks long-term capital growth. FSAIX invests a major portion of its assets in companies primarily engaged in providing air transport services all over the world. FSAIX focuses on acquiring common stocks of companies depending on factors such as financial strength and economic condition. Fidelity Select Air Transportation Portfolio is a non-diversified fund and has returned 19.7% over the past one year.
FSAIX has an expense ratio of 0.86% as compared to category average of 1.39%.