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Mutual Funds and Mutual Fund Investing - Fidelity Investments

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2022 has provided a stark lesson on why investors should care about sectors. The year's top-performing sector, energy, delivered a total return of 54% year-to-date through mid-December.* Compare that with the year's worst performer, communication services. That sector, which includes Meta Platforms, Alphabet, and Netflix, lost 36%.*

Looking to 2023, there are clearly risks on the horizon. But as Eddie Yoon, Fidelity's veteran health care sector portfolio manager puts it: "A lot of negative sentiment has already been priced into stocks." That backdrop could set the stage for a year when investors start to pay attention to fundamentals again—and stock selection matters.

Where should investors be looking? Our sector managers have unearthed plenty of potential opportunities for 2023 and beyond—from plays on the green-energy transition in utilities, to opportunities stemming from the tight real estate market, to potential beneficiaries of the long-term shift to an increasingly digitized world.

Read on to discover Fidelity’s ideas across 11 sectors.

Information
technology

Communication
services

Consumer
staples

Consumer
discretionary

*Energy sector performance is represented by the S&P Energy Select Sector index. The S&P Energy Select Sector index comprises those companies included in the S&P 500 that are classified as members of the energy sector, with capping applied to ensure diversification among companies within the index. Communications services sector performance is represented by the S&P Communications Services Select Sector index. The S&P Communications Services Select Sector index comprises those companies included in the S&P 500 that are classified as members of the communications services sector, with capping applied to ensure diversification among companies within the index. Data as of Dec. 9, 2022.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

Past performance is no guarantee of future results.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

As with all your investments through Fidelity, you must make your own determination whether an investment in any particular security or securities is consistent with your investment objectives, risk tolerance, financial situation, and evaluation of the security. Fidelity is not recommending or endorsing this investment by making it available to its customers.

The stocks mentioned are not necessarily holdings invested in by Fidelity. References to specific company stocks should not be construed as recommendations or investment advice. The statements and opinions are those of the speaker, do not necessarily represent the views of Fidelity as a whole, and are subject to change at any time, based on market or other conditions.

Indexes are unmanaged. It is not possible to invest directly in an index.

Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks. The securities of smaller, less well known companies can be more volatile than those of larger companies.

Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

1008421.2.0

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2023 US sector outlook

Find out where Fidelity's sector managers have found the most compelling opportunities—for 2023 and beyond.

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