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Sector ideas: Health care, tech, and consumer

Hear about opportunities in health care, tech, and consumer. Watch the videos.
  • Biotech. After decades of investment, the growth of research and development within the biotech industry is beginning to produce novel therapeutics for many unmet medical conditions. In 2012, the largest number of new drugs was approved by the U.S. Food and Drug Administration (FDA).3 The five largest biotech companies by market capitalization are Gilead Sciences, Inc. (GILD), Amgen, Inc. (AMGN), Celgene Corporation (CELG), Biogen Idec Inc. (BIIB), and Regeneron Pharmaceuticals, Inc. (REGN).
  • Digitization within health care. With the ballooning costs of health care in mind, companies that can help drive health care costs down could be part of an emerging-growth story. Software companies in the health care information technology industry, and others with business models that can help companies in the healthcare sector reduce costs, may experience increased productivity. They could fundamentally change how health care is delivered in the United States, and potentially around the world, over the next decade.

Sector ideas: Health care, tech, and consumer

Hear about opportunities in health care, tech, and consumer. Watch the videos.
  • Cloud computing. In the roughly $30 billion cloud computing industry, software as a service (SaaS) comprises about two-thirds of revenues.2 This industry builds and delivers software that is hosted “on the cloud.” Essentially, companies that provide SaaS deliver a wide range of services remotely to customers via the Internet. The competitive advantages of SaaS may represent a paradigm shift in the software application industry. The largest provider of SaaS by revenues is salesforce.com, inc. (CRM). Also in the cloud, Amazon.com, Inc. (AMZN), Rackspace Hosting, Inc. (RAX), and Microsoft Azure (MSFT) provide the most infrastructure services.

Sector ideas: Health care, tech, and consumer

Hear about opportunities in health care, tech, and consumer. Watch the videos.
  • Fast fashion. It’s all about the catwalk. This is a segment of the apparel industry where the latest high-end runway apparel styles are made widely available to the masses. Retailers that specialize in fast fashion can recognize current fashionable trends, design their own products based on these trends, and then manufacture the products quickly and at very affordable prices—relative to runway prices. The five largest public apparel retailers by market capitalization are The TJX Companies, Inc. (TJX), Inditex SA (ITX), Hennes & Mauritz AB (HNNMY), The Gap Inc. (GPS), and Fast Retailing Co. Ltd. (FRCOY). Of this group, Inditex and H&M have historically had the largest exposure to fast fashion.

Investing implications

After the powerful four-year move in stocks, some investors may be questioning the sustainability of these gains. However, if companies are able to grow their earnings—and these industries may be able to do just that—then there could potentially be more upside for stocks.

Learn more

  • Research the Fidelity Select Technology Portfolio (FSPTX).
  • Research the Fidelity Select Consumer Discretionary Portfolio (FSCPX).
  • Research the Fidelity Select Health Care Portfolio (FSPHX).
  • Try the Fidelity® Sector Portfolio Builder.
Before investing, consider the investment objectives, risks, charges and expenses of the fund or annuity and its investment options. Call or write to Fidelity or visit Fidelity.com for a free prospectus and, if available, summary prospectus containing this information. Read it carefully.
Views and opinions expressed may not reflect those of Fidelity Investments. These comments should not be viewed as a recommendation for or against any particular security or trading strategy. Views and opinions are subject to change at any time based on market and other conditions.
As of August 31, 2013, the most recent disclosure of Fidelity Select Technology Portfolio's holdings, the fund held salesforce.com, Amazon.com, Rackspace Hosting, and Microsoft.
As of August 31, 2013, the most recent disclosure of Fidelity Select Health Care Portfolio's holdings, the fund held Gilead Sciences, Amgen, Biogen, and Regeneron.
As of August 31, 2013, the most recent disclosure of Fidelity Select Consumer Discretionary Portfolio's holdings, the fund held TJX Companies, The Gap, and Fast Retailing.
Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.
Because of their narrow focus, sector funds tend to be more volatile than funds that diversify across many sectors and companies.
The health care industries are subject to government regulation and reimbursement rates, as well as government approval of products and services, which could have a significant effect on price and availability, and can be significantly affected by rapid obsolescence and patent expirations.
The consumer discretionary industries can be significantly affected by the performance of the overall economy, and by interest rates, competition, consumer confidence and spending, and changes in demographics and consumer tastes.
The technology industries can be significantly affected by obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants, and general economic condition.
1. Equity market performance reflects total returns for the S&P 500® Index and includes reinvested dividends over the period from December 31, 2008, through June 30, 2013. Cumulative total return during this period was 96.19%.
2. Source: Wired.com.
3. Source: Reported new drugs approved by the U.S. Food and Drug Administration through 2012.
Indexes are unmanaged. It is not possible to invest directly in an index.
The S&P 500® Index is a market capitalization–weighted index of common stocks, is a registered service mark of The McGraw-Hill Companies, Inc., and has been licensed for use by Fidelity Distributors Corporation and its affiliates.
Past performance is no guarantee of future results.
Votes are submitted voluntarily by individuals and reflect their own opinion of the article's helpfulness. A percentage value for helpfulness will display once a sufficient number of votes have been submitted.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street. Smithfield, RI 02917

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