Fidelity Select Materials Portfolio Q1 2025 Commentary

2025-05-07 05:40:00 ET

Summary

• Fidelity Select Materials Portfolio is a sector-based equity-focused strategy that seeks to outperform its benchmark through active management.
• For the three months ending March 31, 2025, the materials sector, as measured by the MSCI U.S. IMI Materials 25/50 Linked Index, rose 0.96%, while the broad-market S&P 500 index finished in negative territory, returning -4.27%.
• For the quarter, the fund's Retail Class shares gained 1.25%, modestly outpacing the 0.96% advance of the sector index, the MSCI U.S. IMI Materials 25/50 Linked Index, and more substantially outperforming the -4.27% return of the broad-based S&P 500 index.

Investment Approach

• Fidelity® Select Materials Portfolio is a sector-based equity-focused strategy that seeks to outperform its benchmark through active management.
• We conduct in-depth fundamental research, supported by Fidelity's deep and experienced global cyclicals team, to develop a differentiated view from consensus on product- and end-market trends.
• We follow a contrarian investment approach and focus on companies in which we anticipate a positive change in business fundamentals before it is recognized and properly valued in the company's stock price.
• We also look for reasonably valued stocks of firms with improving returns on capital, healthy free-cash-flow yields, the potential for price-earnings multiple expansion, or defensive-growth characteristics.
• Sector strategies could be used by investors as alternatives to individual stocks for either tactical- or strategic-allocation purposes.

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