Could investors soon start to look beyond e-commerce firms and providers of work-from-home software for other industries that could benefit from coronavirus-related economic shifts?
“I think it’s possible and it may have already started,” says Brian Lempel, co-manager of Fidelity® Select Technology Portfolio (FSPTX), explaining that the pandemic has highlighted the challenges of running a global supply chain, particularly amid rising trade tension and geopolitical conflict with China.
Lempel notes a growing trend for governments to mandate that products they purchase come from domestic manufacturers or firms with closer ties to the US, especially in the medical industry.
He believes this trend is likely to result in healthy growth for electronic manufacturing services (EMS) companies, which provide outsourced manufacturing for a range of technology, industrial, medical, consumer, and automotive products.
Lempel sees growth for EMS companies in non-tech end markets, including the medical field, as well as longer customer contracts, which he thinks could contribute to longer-term earnings stability.
Fidelity® Select Technology Portfolio held securities mentioned in this article as of its most recent holdings disclosure. For specific fund information, including holdings, please click on the fund trading symbol above.
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