Charles Schwab. When retirement becomes a near-term possibility, make a permanent move in a conservative direction. Log in to your WTOP account for notifications and alerts customized for you. Fears of further declines and mounting losses chase investors out of stock funds and push them toward bond funds in a flight to safety. Fidelity. “Consumer staples are one of the steadiest sectors of the market,” Burns says, pointing out that overall returns have remained consistent over the last three decades. Just take a look at how the market has reacted recently. "Municipal Bonds." Issued by state and local governments, these investments leverage local taxing authority to provide a high degree of safety and security to investors. The Fidelity Contrafund. Five funds for investors to hold in a global recession. Investor.gov. In fact, because hedge fund managers make speculative investments, these funds can carry more risk than the overall market. There’s continued opportunity for innovative firms to fill in remaining technology gaps, says David Louton, finance professor at Bryant University. The key is choosing recession-proof mutual funds that hold a diversified portfolio of properties at a reasonable cost. As recession-proof mutual funds go, health care could prove to be a solid buy. Fidelity funds are renowned for their managers' stock-picking prowess. UnitedHealth Group and Pfizer are among the sector fund's top holdings. The herd instinct kicks into overdrive when mutual fund investors hear the word "recession" and news reports show stock prices dropping. For nearly three decades, Will Danoff has run the fund with spectacular long-term results, enabling longtime shareholders to fund … This fund offers exposure to some of the top utilities players, including Duke Energy (DUK) and Dominion Energy (D). Turnover ratio depicts how much of a portfolio has been replaced in a year. And with the recent boom in remote work related to the pandemic, the telecom sector may continue to be bolstered by strong demand for services. Copyright © 2020 by WTOP. The Consumer Staples Select Sector SPDR Fund combines a low expense ratio of 0.13% with exposure to some of the top consumer staples sector brands, including Procter & Gamble (PG) and Walmart (WMT). Options to consider include federal bond funds, municipal bond funds, taxable corporate funds, money market funds, dividend funds, utilities mutual funds, large-cap funds, and hedge funds. That's for good reason. Accessed Mar. “Sector funds allow investors to take targeted bets on the appreciation potential of a particular industry category,” says Daniel Milan, managing partner of Cornerstone Financial Services in Southfield, Michigan. If so, consider these 6 ETFs. 16 March 2020. Best Fidelity Funds 2021 list of best Fidelity funds with top Morningstar ratings. Accessed Mar. The seven best sector funds to buy for a recession: — Consumer Staples Select SPDR Fund — Fidelity MSCI Health Care Index ETF — Aberdeen Standard Gold ETF Trust (SGOL) This Hedge funds are designed to make money regardless of market conditions. They offer higher yields than government-backed issues but carry significantly more risk. Consumer staples funds may not beat the market, but they can provide consistent performance in a recession’s early stages. "Types of Bond Funds." ... All information you provide will be used by Fidelity solely for the purpose of sending the email on your behalf. UnitedHealth Group (UNH) and Pfizer (PFE) are among the sector fund’s top holdings. Investors want the maximum yield with the least risk involved. You can learn more about the standards we follow in producing accurate, unbiased content in our. It is mostly a domestic fund with just 8% foreign investments. Investor.gov. "Utilities Sector Rating: Marketperform." QQQ could be a good recession-proof mutual fund pick if you’re looking for exposure to the biggest tech companies. The Invesco QQQ Trust has continued to perform well, despite first-quarter stock market volatility. "Mortgage Backed Securities." In the case of foul weather funds, your portfolio may not fare well when times are good. Income funds pursue current income over capital appreciation by investing in stocks that pay dividends, bonds and other income-generating securities. Investing in recession-proof mutual funds is one strategy to consider when…. Fixed income may be a smart move, but don't try to time the markets by exiting stock funds when you think growth is slowing and then start investing in bond funds. If you’re interested in building a portfolio of mutual funds that can withstand a recession, consider these seven sector fund options. Capital appreciation by investing in telecoms could pay off if more companies adopt remote-work policies for employees Pfizer... 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