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As the Federal Reserve weighs its options regarding policy, recent signs point to changes in interest rates. Though the likelihood of a rate cut at the March meeting has decreased, reductions later in the year are still under consideration. According to the CME Fedwatch tool, this probability has decreased from 77% earlier this year.
Recent economic data highlights the strength of the U.S. economy, with GDP growing at a rate of 3.3% in the fourth quarter. This positive trend emphasizes the appeal of sectors favored by growth funds, which could benefit from increased consumer spending and lower borrowing costs resulting from rate cuts.
The latest minutes from the Fed meeting also suggest a decline in core Personal Consumption Expenditures (PCE) inflation in the coming years. This gradual easing aims to align with the Fed's 2% target by 2026. This presents an opportunity for growth mutual funds to take advantage of the evolving inflation trends through investment decisions.
Growth mutual funds provide exposure across sectors with growth prospects, such as technology, healthcare and consumer discretionary. These sectors display resilience to changes and offer long-term growth opportunities, making them an appealing choice for investments.
Thus, from an investment standpoint, we have selected three growth mutual funds that are expected to hedge one's portfolio against any economic downturn and provide attractive returns. Mutual funds, in general, reduce transaction costs and diversify the portfolio without commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
These mutual funds, by the way, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio.
BNY Mellon Large Cap Securities Fund (DREVX - Free Report) primarily invests in equity securities of large-cap companies. DREVX advisors use fundamental analysis to create a broadly varied portfolio comprising growth stocks, value stocks or both.
Karen Miki Behr has been the lead manager of DREVX since Sep 22, 2021. Most of the fund’s holdings were in companies like Apple Inc. (8.9%), Microsoft Corp (7.8%), and NVIDIA Corp (6.4%) as of Jun 30, 2023.
DREVX’s 3-year and 5-year annualized returns are 12.8% and 16.5%, respectively. DREVX has a Zacks Mutual Fund Rank #1. Its net expense ratio is 0.70%.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
Madison Mid Cap Fund (GTSGX - Free Report) invests most of its assets in mid-cap securities. GTSGX also invests in common stocks.
Rich Eisinger has been the lead manager of GTSGX since Jan 1, 1998. Most of the fund’s holdings were in companies like Arch Capital Group Ltd. (9%), Ross Stores, Inc. (5.6%) and Gartner, Inc. (5.6%) as of Oct 31, 2023.
GTSGX’s 3-year and 5-year annualized returns are 12.9% and 13.8%, respectively. GTSGX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.94%.
Northern Small Cap Core Fund (NSGRX - Free Report) invests most of its assets in equity securities of small-cap companies falling within the market capitalization range of those included on the Russell 2000 Index at the time of investment.
Robert H. Bergson has been the lead manager of NSGRX since Feb 28, 2010. Most of the fund's holdings were in companies like Northern Institutional Funds U.S. Government Select Portfolio (3.5%), Axcelis Technologies, Inc. (0.5%) and EMCOR Group, Inc. (0.4%) as of Jun 30, 2023.
NSGRX's 3-year and 5-year returns are 3.3% and 7.9%, respectively. NSGRX has a Zacks Mutual Fund Rank #2. The annual expense ratio is 0.59%.
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3 Growth Mutual Funds to Add Your Portfolio
As the Federal Reserve weighs its options regarding policy, recent signs point to changes in interest rates. Though the likelihood of a rate cut at the March meeting has decreased, reductions later in the year are still under consideration. According to the CME Fedwatch tool, this probability has decreased from 77% earlier this year.
Recent economic data highlights the strength of the U.S. economy, with GDP growing at a rate of 3.3% in the fourth quarter. This positive trend emphasizes the appeal of sectors favored by growth funds, which could benefit from increased consumer spending and lower borrowing costs resulting from rate cuts.
The latest minutes from the Fed meeting also suggest a decline in core Personal Consumption Expenditures (PCE) inflation in the coming years. This gradual easing aims to align with the Fed's 2% target by 2026. This presents an opportunity for growth mutual funds to take advantage of the evolving inflation trends through investment decisions.
Growth mutual funds provide exposure across sectors with growth prospects, such as technology, healthcare and consumer discretionary. These sectors display resilience to changes and offer long-term growth opportunities, making them an appealing choice for investments.
Thus, from an investment standpoint, we have selected three growth mutual funds that are expected to hedge one's portfolio against any economic downturn and provide attractive returns. Mutual funds, in general, reduce transaction costs and diversify the portfolio without commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
These mutual funds, by the way, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio.
BNY Mellon Large Cap Securities Fund (DREVX - Free Report) primarily invests in equity securities of large-cap companies. DREVX advisors use fundamental analysis to create a broadly varied portfolio comprising growth stocks, value stocks or both.
Karen Miki Behr has been the lead manager of DREVX since Sep 22, 2021. Most of the fund’s holdings were in companies like Apple Inc. (8.9%), Microsoft Corp (7.8%), and NVIDIA Corp (6.4%) as of Jun 30, 2023.
DREVX’s 3-year and 5-year annualized returns are 12.8% and 16.5%, respectively. DREVX has a Zacks Mutual Fund Rank #1. Its net expense ratio is 0.70%.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
Madison Mid Cap Fund (GTSGX - Free Report) invests most of its assets in mid-cap securities. GTSGX also invests in common stocks.
Rich Eisinger has been the lead manager of GTSGX since Jan 1, 1998. Most of the fund’s holdings were in companies like Arch Capital Group Ltd. (9%), Ross Stores, Inc. (5.6%) and Gartner, Inc. (5.6%) as of Oct 31, 2023.
GTSGX’s 3-year and 5-year annualized returns are 12.9% and 13.8%, respectively. GTSGX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.94%.
Northern Small Cap Core Fund (NSGRX - Free Report) invests most of its assets in equity securities of small-cap companies falling within the market capitalization range of those included on the Russell 2000 Index at the time of investment.
Robert H. Bergson has been the lead manager of NSGRX since Feb 28, 2010. Most of the fund's holdings were in companies like Northern Institutional Funds U.S. Government Select Portfolio (3.5%), Axcelis Technologies, Inc. (0.5%) and EMCOR Group, Inc. (0.4%) as of Jun 30, 2023.
NSGRX's 3-year and 5-year returns are 3.3% and 7.9%, respectively. NSGRX has a Zacks Mutual Fund Rank #2. The annual expense ratio is 0.59%.
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 >>