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Sector Investment Strategies

Whether you're looking to gain a performance edge, or simply want to diversify your portfolio, these sector-based strategies can help you find your next investing opportunity.

Invest using the business cycle

The business cycle has four phases that reflect fluctuations in the U.S. economy, and each phase may have an effect on sector performance. Historically, some sectors tend to perform better or worse than others in certain phases. Monitoring the business cycle may help you determine which sectors you should focus your investing on during each phase.

Invest in a theme

Investing in a particular sector or industry may help you get exposure to particular companies, industries, or trends that may be poised for long-term growth. Themes may include the rise of cloud computing in the Information Technology sector, or innovations in drilling technology associated with the Energy sector.

Tilt your portfolio

If you feel that a particular sector suits your investing goals, based on economic, fundamental, or technical research that you've conducted, you can choose to "tilt" your portfolio (that is, overweight that sector in your portfolio relative to the sector's weighting in the broader market). You can also do this in the other direction, tilting away from a particular sector you feel could be a drag on your portfolio, by underweighting it.

Gain income from dividends

Some sectors offer the potential for dividend income, and may be a good way to bring more income into your portfolio. Companies in the Utilities sector, the Telecommunications sector, the Consumer Staples sector, and the Real Estate sector offer some of the best opportunities for dividend income.

Before investing in any mutual fund or exchange traded fund, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.

Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk.

Past performance is no guarantee of future results.

Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Sector funds can be more volatile because of their narrow concentration in a specific industry.

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