Don Dion, publisher of Fidelity Independent Adviser announced portfolio changes today that shift assets from materials and telecommunications to biotechnology. The two trades place biotechnology prominently in two of Fidelity Independent Adviser’s model portfolios: Fidelity Select Portfolio and NTF Sector Portfolio.
“Problems with big banks haven’t left much room to hide in the markets over the past few weeks,” Dion noted in his weekly feature, “Don’s Outlook.” Dion had been trying to reposition his portfolio to take advantage of areas that could still offer investors returns, noting that, “An exception to market malaise is the biotechnology sector, which has benefited both from the recent debut of a handful of promising new drugs and the prospect of consolidation.”
Fidelity Independent Adviser, which has been published monthly for more than 11 years and reaches over 40,000 subscribers, includes a variety of model portfolios to meet a broad range of investment needs. Together with a fund ranking system, hotlines and commentary, Dion’s model portfolios seek to give investors a comprehensive look at the mutual fund universe.
The Fidelity Select Portfolio, which sold Fidelity Select Materials (FSDPX) and purchased Fidelity Select Biotechnology (FBIOX), is growth oriented, seeking above market annual returns over the long term by assuming greater-than-market-risk. The Fidelity Select Portfolio invests primarily in stocks, using various sector, industry, and regional Fidelity mutual funds for aggressive results.
“While this year emerging markets have been slowing our Fidelity Select Portfolio,” Dion noted, “our healthcare holdings have produced good returns.” Dion’s other healthcare fund in this portfolio is Fidelity Select Medical Equipment & Systems (FSMEX), which Dion noted had “gained 4.62 percent in July.”
Fidelity Independent Adviser’s other Biotechnology shift, in the NTF Sector Portfolio, swapped Rydex Telecommunications (RYMIX) for Rydex Biotechnology (RYOIX). Dion’s NTF Sector Portfolio also invests primarily in stocks, using various sector and industries to capture above market annual returns. This portfolio differs in that it also uses no-transaction-fee mutual funds, and doesn’t rely solely on Fidelity’s offerings.
Does Dion see Biotechnology being a long-term addition to his portfolios? “For investors hoping to ride out the current volatility with a minimum of damage to their portfolios, I’m advising a defensive posture,” Dion concluded in his commentary. “Pharmaceuticals, consumer staples and, to a lesser extent, utilities ought to hold up well during the second half of the year,” Dion added, “I’m not looking for a sustained turnaround in the financial sector until next year.”
About Fidelity Independent Adviser
Family of Newsletters: With more than 70,000 subscribers in the United States and 29 other countries, Fidelity Independent Adviser publishes four monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.
About Don Dion, publisher of Fidelity Independent Adviser
In addition to his role as the publisher of Fidelity Independent Adviser, Don Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Massachusetts, Dion Money Management manages more than $700 million in assets for clients in 49 states and 11 countries. A licensed attorney in Massachusetts and Maine, Mr. Dion has more than 25 years’ experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.