The Fidelity Select Utilities Portfolio (FSUTX) posted an impressive 8.09% gain for its Retail Class shares during the third quarter of 2025. This strong showing was largely consistent with the 8.02% rise of its primary benchmark, the MSCI U.S. IMI Utilities 25/50 Index, and was nearly on par with the broader market's 8.12% return as measured by the S&P 500 index. This performance underscores the fund's effective active management approach within the utilities sector, which prioritizes companies poised for sustainable earnings growth and favorable valuations. The portfolio continues to concentrate on identifying mispriced opportunities, leveraging its deep understanding of market dynamics to secure value for its shareholders.
The investment philosophy guiding the Fidelity Select Utilities Portfolio is anchored in a sector-specific, equity-focused strategy. This entails a rigorous selection process aimed at pinpointing utility companies with compelling growth trajectories and sound financial health. The fund managers are particularly keen on enterprises operating within investor-friendly regulatory frameworks, ensuring a stable and predictable operating environment. Additionally, a strong emphasis is placed on companies with prudent balance sheet management, which signals financial resilience and a capacity for strategic capital deployment. This meticulous screening allows the portfolio to construct a resilient and growth-oriented selection of utility stocks.
A significant part of the fund's strategy involves favoring companies that are strategically positioned to benefit from the evolving energy landscape. This includes a preference for electric utilities and independent power producers that are making substantial capital investments in response to increasing demand. Key drivers of this demand include the rapid expansion of artificial intelligence (AI) infrastructure, the growing adoption of electric vehicles (EVs), and the ongoing trend of manufacturing reshoring. By focusing on these areas, the portfolio aims to capture long-term growth opportunities arising from these transformative shifts in technology and industry.
Furthermore, the portfolio’s commitment to active management means a continuous search for companies whose market prices do not fully reflect their intrinsic value, based on their underlying growth prospects and return profiles. This active approach allows for dynamic adjustments in response to market conditions and emerging opportunities, moving beyond passive index tracking. The objective is not merely to match benchmark performance but to consistently surpass it through diligent research, expert analysis, and timely investment decisions, thereby enhancing shareholder value over time.
In the third quarter of 2025, the Fidelity Select Utilities Portfolio's Retail Class shares recorded an 8.09% increase, a result that closely mirrored the 8.02% gain of the MSCI U.S. IMI Utilities 25/50 Index. This performance also kept pace with the 8.12% return of the S&P 500, highlighting the fund's ability to navigate the market effectively while focusing on its core strategy of investing in utilities with strong growth potential and attractive valuations.