The uncertainty with respect to the Federal Reserve’s interest-rate policy is still present. However, equities have strengthened due to low inflation, solid earnings by companies and a stable economy supported by resilient labor markets and steady consumer spending. At the same time, the continued large investment in AI is driving strong demand for semiconductor companies. Advances in drug development and healthcare are fostering a very good environment for biotechnology stocks. Moreover, improved economic conditions and attractive valuations have made this a great period for the emerging markets. Together, these factors are shaping the market outlook for the remainder of 2026.
We have picked three mutual funds — Fidelity Advisor Semiconductors Fund FIKGX, ClearBridge SMASh Series EM Fund LCSMX and Fidelity Advisor Biotechnology Fund FBTIX— which investors should buy now for the long term. These funds have a Zacks Mutual Fund Rank #2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.
Fidelity Advisor Semiconductors Fund invests most of its net assets in common stocks of domestic and foreign companies that are principally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FIKGX chooses to invest in stocks based on fundamental analysis factors such as each issuer’s financial condition, industry position, and market and economic conditions.
Sonu Kalra has been the lead manager of FIKGX since July 15, 2026. Most of the fund’s holdings were in companies like NVIDIA Corp (24.8%), Broadcom Inc. (10.6%) and Marvell Technology, Inc. (7.7%) as of Jan. 31, 2026.
FIKGX has gained 50.4% on a year-to-date (YTD) basis. The fund has also returned 135.4% over the past year.
FIKGX ‘s 3-year and 5-year annualized returns are 59.6% and 41.1%, respectively. FIKGX net expense ratio is 0.55%. FIKGX carries a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
ClearBridge SMASh Series EM Fund invests a majority of its net assets plus any borrowings in securities of issuers with substantial economic ties to one or more emerging market countries or similar investments. LCSMX primarily holds equity and equity-related securities, including common and preferred stocks, convertibles, depositary receipts, REITs, other investment companies (including ETFs), and synthetic foreign equity securities, and may use index futures to obtain market exposure, attempt to enhance returns, and to manage cash.