Fidelity Envir and Alt Energy Fund (FSLEX) | Daily Alert October 12
Until recently a Select fund, Environment & Alternative Energy is now a part of Fidelity’s expanding suite of “socially conscious” funds. But a mere name change is not the full extent of its metamorphosis.
While Alt Energy’s primary investment objective remains capital appreciation, 80% of its assets must be assigned to companies that are “principally engaged” in alternative and renewable energy production, energy efficiency, pollution control, water infrastructure and even waste management.
Benchmarked against the FTSE Environment Opportunities & Alternative Index, the fund’s new co-managers rely on Fidelity’s proprietary ESG screens as a first cut in defining its investable universe.
While the fund’s rising large-cap growth-stock exposure has pushed it away from value, Alt Energy remains an economically sensitive industrial fund, albeit one not tied to Rust Belt manufacturers.
Jack Bowers, John M. Boyd and John Bonnanzio, Fidelity Monitor & Insight, fidelitymonitor.com, 800-397-3094, October 2021
Invesco Solar ETF (TAN) | Daily Alert September 22
The Invesco Solar ETF is used as a proxy for the solar industry and has 100% of its holdings in solar manufacturing and related equipment including the technology to operate power plants, store energy, and build related equipment. It is passively managed, follows the MAC Global Solar Energy Index, and is rebalanced quarterly. It has $3.2 billion in assets and 56 holdings.
About half of the companies are in the US, with roughly a quarter each in Asia and Europe.
The ETF offers broad diversification within the solar sector with a reasonable management expense ratio of 0.50%. Its higher weighting towards North American companies means a greater participation in higher-margin solar products, including inverters, which are the brains of these systems.
Adam Mayers in Gordon Pape’s Internet Wealth Builder, buildingwealth.ca, 1-888-287-8229, September 13, 2021
*Third Avenue Real Estate Value Fund Investor Class (TVRVX)
Third Avenue Real Estate Value Investor Fund is up 17.9% so far in 2021. It has an advantage over other mutual funds during recessions. Unlike the typical REIT, management will go to cash when asset prices are generally high. Cash is preserved for scooping up opportunities.
It is a global real estate fund which means it is not confined to US real estate with low cap rates which translate to high valuations. Management looks for growth more than current income by focusing on real estate operating companies which, unlike REITs, can reinvest profits back into the business. Management also searches for opportunities in different aspects of a real estate company’s capital structure by investing in senior debt in addition to equity.
Gray Cardiff, Sound Advice, soundadvice-newsletter.com, 800-825-7007, September 30, 2021
*iShares U.S. Telecommunications ETF (IYZ)
Over the last 15 years, Telecom has generated an average return of 2.7% during its bullish seasonality from the middle of October through around year end. This is the top ETF within this sector. Use a buy limit of $32.85 and stop loss of $29.57. If above-average gains materialize, take profits at the auto sell of $37.11. Top 5 holdings are: Comcast, Cisco Systems, Verizon, AT&T and Charter Communications. Aggressive competition has hindered the sector, but IYZ does boast a 12-month trailing yield of 2.46% as of August 31.
Jeffrey A. Hirsch, Stock Trader’s Almanac, stocktradersalmanac.com, 800-762-2974, October 7, 2021