Fidelity Select funds are a group of 42 industry sector funds and a money market fund.
Many mutual funds and exchange-traded funds (ETFs) are industry sector funds. Fidelity has the most sector funds. Usually a mutual fund or ETF family creates sector funds by buying stock from the most representative companies in an industry sector. That usually leads to buying stock from the largest market capitalization companies and just holding them. That is passive management. Fidelity, on the other hand, manages the Selects actively. Each Select fund manager attempts to buy the best stocks in the appropriate sector and to sell stocks he no longer likes. This leads to higher turnover but usually a better performance for the fund. Another consequence is that the fund holds smaller-capitalization stocks, which we believe have a higher trend persistency.
To STS home page | About DollarLink Software