4 Funds to Buy as Indoor Entertainment Keeps Rolling

·6 min read

Entertainment stocks and funds have been making headlines in the past year, especially during the pandemic. This is because millions were forced to stay indoors and people have been showing greater inclination toward mobile gaming, online streaming and more forms of entertainment. Outdoor or physical entertainment experiences will surely make a comeback post-pandemic but many of these indoor entertainment options are here to stay.

This has also made big names in entertainment like The Walt Disney Company focus more on offering products for indoor entertainment. After launching Disney+ in November 2019, the company has managed to keep itself in the entertainment league during the pandemic. Despite Disney’s theme parks remaining closed worldwide, its streaming services have offered a huge portfolio of movies and series for people to binge on for days. In fact, now with restrictions being eased, Walt Disney studios can restart filming and this will help them offer a ton of new options. This year, Disney’s Marvel Entertainment or Marvel Studios has produced several successful hits. The ones worth mentioning are WandaVision, and The Falcon and the Winter Soldier that have been the streaming service’s epic successes so far.

Other streaming services like Amazon Prime and Netflix are also offering content through their own production studios and have found quite an audience. According to Grand View Research's market research survey, the global streaming market was worth $42.6 billion in 2019. And by 2027, it is projected to rise at a rate of more than 20% each year, reaching a total of $184.3 billion.

Gaming has always appealed to a specific age group, from playing on a personal computer to taking part in gaming conventions across the globe. However, the pandemic drove demand for online and mobile gaming massively. Irrespective of the demographical boundaries, people have increased or begun playing games online more during the lockdowns and it has also kept them connected with friends and family. The number of casual players has significantly increased and per App Annie’s State of Mobile Gaming 2021 report, casual games led the way in terms of downloads, comprising 78% of all game downloads compared with 20% for core games and 2% for casino games.

Even as people start spending more time outside as the pandemic woes ease, they will continue to enjoy these indoor entertainment options in the coming day. Especially with the deployment of 5G, there will be a boom in the mobile cloud gaming market and streaming services. 5G’s high data availability, network capacity, emerging time-critical communications and ultra-reliable low-latency communication will make indoor entertainment options more enjoyable.

4 Top Fund Picks

Indoor entertainment will surely keep booming; hence we have highlighted four mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and invest in companies that can make the most from the momentum in the gaming space. Moreover, these funds have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform peers in the future.

The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

T. Rowe Price Global Technology Fund PRGTX aims for long-term capital growth. This non-diversified fund invests most of assets in the common stocks of companies that its managers expect will generate majority of their revenues from the development, advancement and use of technology.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, PRGTX has returned 27% and 28.5% in the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

PRGTX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.86%, which is below the category average of 1.05%. Some of the fund’s stock holdings that are engaged in indoor entertainment are Snap, Tencent and Facebook.

Fidelity Select Technology Portfolio FSPTX aims for capital appreciation. This non-diversified fund invests primarily in equity securities, especially common stocks of companies that are engaged in offering, using, or developing products, processes, or services that will provide or will benefit significantly from technological advances and improvements.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, FSPTX has returned 29.8% and 31.3% in the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FSPTX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.71%, which is below the category average of 1.05%. Some of the fund’s stock holdings that are engaged in indoor entertainment are Sony, Facebook and Microsoft.

Fidelity Select Leisure Portfolio FDLSX aims for capital appreciation. This non-diversified fund normally invests majority of assets in common stocks of companies that are mostly engaged in the design, production, or distribution of goods or services in the leisure industries.

This Zacks Sector – Other has a history of positive total returns for more than 10 years. Specifically, FDLSX has returned 15.7% and 15.4% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FDLSX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.77%, which is below the category average of 0.80%. Some of the fund’s stock holdings that are engaged in indoor entertainment are Penn National Gaming, Walt Disney Company and Boyd Gaming. 

DWS Science and Technology Fund - Class A KTCAX aims for capital growth. This non-diversified fund invests majority of assets in common stocks of science and technology companies.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. KTCAX has returned 25.9% in the past three and five years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

KTCAX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.90%, which is below the category average of 1.05%. Some of the fund’s stock holdings that are engaged in indoor entertainment are Microsoft and Facebook.

Want key mutual fund info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.

Get it free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Get Your Free (PRGTX): Fund Analysis Report
 
Get Your Free (FSPTX): Fund Analysis Report
 
Get Your Free (FDLSX): Fund Analysis Report
 
Get Your Free (KTCAX): Fund Analysis Report
 
To read this article on Zacks.com click here.