Fidelity Independent Adviser - Fidelity Select Natural Gas (FSNGX): Sector Momentum Tracker Reports

Don Dion, Publisher of Sector Momentum TrackerStore this angel in big sizeIn the latest copy of Fidelity Independent Adviser’s Sector Momentum Tracker, administrator Don Dion discusses contempo trends in accustomed gas and gives his angle for Fidelity Select Natural Gas (FSNGX).

FSNGX was up about 19% year to date on June 23, but by August 8 it was down 13.2% for the year. The fund, which topped Dion’s Sector Momentum Tracker rankings table from April 18 to June 27, slid to tenth endure week, afterwards a ages in which it fared worse (-7.9%) than 99% of all accustomed ability funds tracked by Morningstar.

Sector Momentum Tracker—one of Fidelity Independent Adviser’s three momentum-based publications—has been appear account back June of 2004. As of August 11, Dion’s Sector Portfolio had alternate 23.48% net of fees back inception, outperforming the S&P 500 by about 8% for the aforementioned period. “FSNGX has been in our portfolio back October of 2007,” Dion said, “and admitting the contempo slide, the armamentarium is still up 2.52% for a one year aeon catastrophe August 11.”

“Natural gas prices about abate in summer, if appeal for the ammunition for heating is negligible,” Dion noted, “but there’s apparently added than just that abaft the contempo amount plunge.” Natural gas awash on the New York Mercantile Exchange for added than $13 per actor BTUs (British thermal units) in aboriginal July but fell for 5 beeline weeks (as of August 6), dipping as low as $8.50 by August 8.

In his contour of FSNGX, Dion cited weather, assembly and accumulator levels a allotment of the causes of the accustomed gas slide. “Obviously, this is a airy fund, abounding of fits and starts,” Dion said. “Halfway through 2008, Fidelity Select Natural Gas was assertive to bear 40% or greater allotment for the year, as it did in 2007, 2005 and 2004,” Dion added, “but the abatement in accustomed gas prices during the endure few weeks fabricated that questionable.”

While Dion believes that accustomed gas prices are the primary culprit in FSNGX’ downturn, he aswell places some of the onus on the fund’s manager—James McElligott: “McElligott’s overweighted of E&P stocks and underweighted stocks of firms apparent to accustomed gas and oil refining, marketing, and transportation.” Dion believes that while this weighting served the armamentarium able-bodied if prices were aerial and accumulation margins for refiners were shrinking, but that “at the moment, that’s not happening.”

Can FSNGX achieve drive in Dion’s rankings? Dion is not absolutely unconvinced: “With activity prices and appeal for ‘greener’ ability high, added and added North American electric utilities will about-face from coal-fired bearing to natural-gas generation, active up demand.” Dion aswell believes that “more automated and electric bearing consumers could await on accustomed gas if prices break low, appropriation demand.

Despite these able factors, Dion,—who is aswell the admiral of a money administration firm- sees FSNGX as potentially chancy for investors: “FSNGX is an acutely airy fund—measured by its three-year accepted aberration of 27.50, which is additional alone to Fidelity Select Gold in volatility.” While he is quick to agenda that “FSNGX is able of outsized gains,” Dion aswell cautions that “the armamentarium is aswell able of abysmal slides and should be advised as such—as a alcove holding.”

Top 10 Holdings*
Chesapeake Energy6.81%
Plains Exploration & Production 6.54%
Ultra Petroleum 6.20%
Range Resources5.34%
Denbury Resources4.50%
Southwestern Energy4.45%
Quicksilver Resources 4.06%
Valero Energy3.80%
EOG Resources3.16%
Canadian Natural Resources3.10%

Sector Momentum Tracker is a affiliate of Fidelity Independent Adviser’s ancestors of publications. With added than 70,000 subscribers in the United States and 29 added countries, Fidelity Independent Adviser publishes four account newsletters and three account newsletters. Its flagship publication, Fidelity Independent Adviser, has been appear account for 11 years and alcove 40,000 subscribers.

Don Dion is the administrator of the Fidelity Independent Adviser ancestors of newsletters, which provides to a ample ambit of investors Don’s annotation on the banking markets, with a specific accent on alternate funds and exchange-traded funds. Dion is aswell admiral and architect of Dion Money Management, a fee-based investment advising close to even individuals, families and nonprofit organizations, area he is amenable for ambience investment policy, creating custom portfolios and administering the achievement of applicant accounts. Founded in 1996 and based in Williamstown, Massachusetts, Dion Money Management manages added than $715 actor in assets for audience in 49 states and 11 countries.

Fidelity Independent Adviser
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Phone: 1-800-432-7447
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Don Dion
Publisher
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Website: www.fidelityadviser.com

Fidelity Independent Adviser is a ancestors of newsletters, that provides to a ample ambit of investors Don Dion’s annotation on the banking markets, with a specific accent on alternate funds and exchange-traded funds. With added than 70,000 subscribers in the United States and 29 added countries, Fidelity Independent Adviser publishes four account newsletters and three account newsletters. www.fidelityadviser.com/