Fidelity Select Technology Portfolio Q1 2025 Commentary

2025-05-07 06:45:00 ET

Summary

• Fidelity Select Technology Portfolio is a sector-based, equity-focused strategy that seeks to outperform its benchmark through active management.
• The first quarter of 2025 was a difficult one for technology stocks.
• For the quarter, the fund produced a return of -14.26%, trailing the -12.68% result of the MSCI U.S. IMI Information Technology 25/50 Index and considerably behind the S&P 500.
• We begin the second quarter with an unusual degree of uncertainty about trade and tariff policy, as well as wide-ranging efforts to reduce the federal workforce.

Investment Approach

• Fidelity® Select Technology Portfolio is a sector-based, equity-focused strategy that seeks to outperform its benchmark through active management.
• We believe the value of technology stocks is in large part determined by the companies' future potential to generate earnings and cash flow.
• Our investment framework also focuses on identifying themes that impact the largest end markets, determining potential winners/losers, and how certain companies that are technology disruptors can impact incumbents.
• The technology sector is a very specialized part of the market, and our experience allows for proficiency in specific domains, aiding in recognizing investment opportunities when they arise.
• Through bottom-up research and by leveraging Fidelity's vast expertise – in addition to insights from industry experts, technologists, suppliers and competitors – we develop a differentiated view on the fundamentals in seeking to identify companies with compelling risk/reward profiles.
• Sector strategies could be used by investors as alternatives to individual stocks for either tactical- or strategic-allocation purposes.

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