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3 Solid Growth Funds to Make the Most of the November Rally
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Markets have bounced back this year after a disappointing 2022. Although the rally somewhat stalled in August and September as worries of an impending recession grew, Wall Street staged a rebound in late October.
November has so far been one of the best months for markets as inflation is showing signs of cooling and expectations are high that the Federal Reserve may not increase interest rates in its December policy meeting.
The Dow, S&P 500 and Nasdaq have returned 6.4%, 18.7% and 36.3%, respectively, year to date. The rally came on the back of easing inflation that has raised hopes that the Fed may be done with its interest rate hikes.
Although Federal Reserve officials have agreed to take a cautious approach and are open to more interest rate hikes, if required, as inflation is still above its 2% target, investors have been ignoring their hawkish comments.
This has made them confident that the central bank may likely refrain from increasing interest rates in its December FOMC meeting. The optimism comes primarily because inflation declined further in October.
In October, the consumer price index (CPI) remained unchanged from the previous month’s 0.4%. Year over, year, CPI rose 3.2% in October, down from September’s rate of 3.7%.
Also, the producer price index (PPI), which measures wholesale inflation fell 0.5% in October after increasing 0.1% in September. This was also the biggest monthly decline since April 2020. Year over year, PPI rose 1.3% in October, sharply down from September’s increase of 2.2%.
Markets traditionally go on a rally during the holiday season and this year appears to be no different. Thus, investors prioritizing capital appreciation over dividend payouts may consider investing in growth mutual funds as that could be beneficial. These funds typically have exposure to a mix of large, mid, and small-cap stocks that are expected to increase in value over an extended period.
Our Choices
As a result, we've chosen three growth funds that are worth buying. These funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Bridgeway Aggressive Investors (BRAGX - Free Report) fund invests most of its net assets in common stocks of companies irrespective of their size that are listed on the New York Stock Exchange, NYSE American and NASDAQ. BRAGX advisors may also invest in stocks for which there is relatively low market liquidity, as periodically determined by the adviser based on the stock's trading volume.
Bridgeway Aggressive Investors fund has a track of positive total returns for over 10 years. Specifically, BRAGX’s returns over the three and five-year benchmarks are 10.7% and 12.4%, respectively. The annual expense ratio of 0.32% is lower than the category average of 0.84%. BRAGX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
PRIMECAP Odyssey Aggressive Growth (POAGX - Free Report) fund prioritizes investing in U.S. companies having rapid earnings growth potential. Though POAGX invests across market sectors and market caps, it has historically invested most of its assets in mid to small-cap firms.
PRIMECAP Odyssey Aggressive Growth fund has a track of positive total returns for over 10 years. Specifically, POAGX’s returns over the three and five-year benchmarks are 2% and 5.3%, respectively. The annual expense ratio of 0.65% is lower than the category average of 1.09%. POAGX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
TRP Integrated US Small-Cap Gr Eq (PRDSX - Free Report) fund seeks long-term capital appreciation by investing primarily in common stocks at small growth companies. PRDSX invests 80% of its net assets in small-cap growth companies defined as companies whose market capitalization is within the range of smaller companies on the Standard & Poor's 500 Stock Index.
TRP Integrated US Small-Cap Gr Eq fund has a track of positive total returns for over 10 years. Specifically, PRDSX’s returns over the three and five-year benchmarks are 1.7% and 5.4%, respectively. The annual expense ratio of 0.66% is lower than the category average of 1.21%. PRDSX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
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3 Solid Growth Funds to Make the Most of the November Rally
Markets have bounced back this year after a disappointing 2022. Although the rally somewhat stalled in August and September as worries of an impending recession grew, Wall Street staged a rebound in late October.
November has so far been one of the best months for markets as inflation is showing signs of cooling and expectations are high that the Federal Reserve may not increase interest rates in its December policy meeting.
The Dow, S&P 500 and Nasdaq have returned 6.4%, 18.7% and 36.3%, respectively, year to date. The rally came on the back of easing inflation that has raised hopes that the Fed may be done with its interest rate hikes.
Although Federal Reserve officials have agreed to take a cautious approach and are open to more interest rate hikes, if required, as inflation is still above its 2% target, investors have been ignoring their hawkish comments.
This has made them confident that the central bank may likely refrain from increasing interest rates in its December FOMC meeting. The optimism comes primarily because inflation declined further in October.
In October, the consumer price index (CPI) remained unchanged from the previous month’s 0.4%. Year over, year, CPI rose 3.2% in October, down from September’s rate of 3.7%.
Also, the producer price index (PPI), which measures wholesale inflation fell 0.5% in October after increasing 0.1% in September. This was also the biggest monthly decline since April 2020. Year over year, PPI rose 1.3% in October, sharply down from September’s increase of 2.2%.
Markets traditionally go on a rally during the holiday season and this year appears to be no different. Thus, investors prioritizing capital appreciation over dividend payouts may consider investing in growth mutual funds as that could be beneficial. These funds typically have exposure to a mix of large, mid, and small-cap stocks that are expected to increase in value over an extended period.
Our Choices
As a result, we've chosen three growth funds that are worth buying. These funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Bridgeway Aggressive Investors (BRAGX - Free Report) fund invests most of its net assets in common stocks of companies irrespective of their size that are listed on the New York Stock Exchange, NYSE American and NASDAQ. BRAGX advisors may also invest in stocks for which there is relatively low market liquidity, as periodically determined by the adviser based on the stock's trading volume.
Bridgeway Aggressive Investors fund has a track of positive total returns for over 10 years. Specifically, BRAGX’s returns over the three and five-year benchmarks are 10.7% and 12.4%, respectively. The annual expense ratio of 0.32% is lower than the category average of 0.84%. BRAGX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
PRIMECAP Odyssey Aggressive Growth (POAGX - Free Report) fund prioritizes investing in U.S. companies having rapid earnings growth potential. Though POAGX invests across market sectors and market caps, it has historically invested most of its assets in mid to small-cap firms.
PRIMECAP Odyssey Aggressive Growth fund has a track of positive total returns for over 10 years. Specifically, POAGX’s returns over the three and five-year benchmarks are 2% and 5.3%, respectively. The annual expense ratio of 0.65% is lower than the category average of 1.09%. POAGX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
TRP Integrated US Small-Cap Gr Eq (PRDSX - Free Report) fund seeks long-term capital appreciation by investing primarily in common stocks at small growth companies. PRDSX invests 80% of its net assets in small-cap growth companies defined as companies whose market capitalization is within the range of smaller companies on the Standard & Poor's 500 Stock Index.
TRP Integrated US Small-Cap Gr Eq fund has a track of positive total returns for over 10 years. Specifically, PRDSX’s returns over the three and five-year benchmarks are 1.7% and 5.4%, respectively. The annual expense ratio of 0.66% is lower than the category average of 1.21%. PRDSX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
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 >>