Portfolio Manager Insights

Stocks aligned with trends in U.S. income disparity

As the nation’s wealth and spending gap has widened, Fidelity’s Jordan Michaels has focused on consumer discretionary companies serving both lower- and higher-income households.

By: Jordan Michaels
Updated: 6/15/2026
  • With the U.S. wealth gap at a three-decade high, Fidelity Portfolio Manager Jordan Michaels invests in businesses offering products and services across distinct consumer cohorts.
  • “High-income earners in the U.S. have benefited from a record stock market – largely driven by the artificial intelligence boom – and rising homeowner equity, whereas lower-income earners have been constrained by high inflation, stagnant wages and limited exposure to asset appreciation,” explains Michaels, who manages Fidelity Advisor® Consumer Discretionary Fund. “As such, I’m targeting companies well-positioned to serve each of these segments.”
  • In helming the sector-focused equity strategy, Michaels relies on company-specific research and a disciplined view of fundamentals, favoring firms he believes are underappreciated relative to their quality and growth prospects.
  • Recently, this focus has led him to positions he believes can perform well amid what he sees as a dynamic, “K-shaped” economy. He notes that the top 10% of earners – households making at least $210,000 annually – account for about half of U.S. spending and hold roughly 70% of total wealth as of 2025, according to recent research.
  • To that end, Michaels has selected several companies catering to higher-income consumers, including Somnigroup International, the maker of Tempur-Pedic premium mattresses. In retail home improvement, he’s favored Lowe’s, while he believes Hilton Worldwide Holdings has the potential to benefit from its luxury hotels, including the Waldorf Astoria brand, as well as its exposure to business travel.
  • Conversely, he notes that lower-income consumers have generally been more affected by rising inflation and tariffs, as they allocate a larger share of their spending on groceries, housing, and other essential goods and services that have surged in price since the pandemic.
  • Accordingly, Michaels cites stakes in value-focused retailers he believes are well-positioned to grow sales. These include off-price leaders TJX and Ross Stores, two chains that seek to capitalize on excess and cancelled inventory from full-price retailers by purchasing it at steep discounts and passing the savings on to bargain-conscious customers.
  • Similarly, persistent economic headwinds have boosted traffic at discount retailer Dollar Tree, whose customer base spans a wide range of income levels, according to Michaels.
  • “Importantly, each of these business models tends to be less sensitive to the economy than many specialty retailers, which may provide additional resilience for the fund if markets get bumpy,” he concludes.

Securities mentioned were fund investments as of April 30, 2026.

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Active management Consumer Discretionary Equity Income Inflation Sectors
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Fidelity Advisor Consumer Discretionary Fund (FFNQX)

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