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3 Gold Mutual Funds You Should Grab Today

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On Apr 23, gold prices hit a more than one-week high to reach $1.738.58. Such a rally in the price of yellow metal was made possible by expectations of more economic stimulus from the U.S. government, particularly after the weekly jobless claims hit a mind-numbing 26 million over the past five weeks.

On Thursday, the U.S. House of Representatives approved a coronavirus relief package of $484 billion. This bill was aimed at funding small businesses across the country. Furthermore, the passing of this bill now puts the total government spending to combat the effects of the pandemic to approximately $3 trillion.

On the other hand, leaders from the European Union (EU) also agreed to establish a trillion euro emergency fund to fight the pandemic.

In such a scenario of widespread economic distress, political uncertainty and inflationary woes, gold prices shoot higher. This is because the yellow metal is viewed as a hedge against inflation by seasoned investors.

Meanwhile, gold prices dipped about 1% early Friday after investors booked profits. However, the U.S. Manufacturing PMI dipped to an 11-year low and kept gold on track for weekly gain. Gold price is up by as much as 2.3% so far this week and is currently at $1,730.37 per ounce.

Analysts believe that gold prices will continue to find support from across the world in the near future as global central banks announce stimulus packages in response to the coronavirus pandemic.

3 Best Choices

We have, thus, selected three gold mutual funds with a Zacks Mutual Fund Rank #1 (Strong Buy) and 2 (Buy) that are poised to gain from such factors. Moreover, these funds have encouraging five-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

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 the reasons why one should be parking money in mutual funds (read more:  Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Franklin Gold and Precious Metals Fund Class A (FKRCX - Free Report) aims for capital growth. The fund invests the majority of its assets in securities of companies that are engaged in operations of gold and precious metals. The non-diversified fund may invest across all market capitalizations.

This Zacks sector - Precious Metal product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FKRCXhas a Zacks Mutual Fund Rank of #1 and an annual expense ratio of 0.98%, which is below the category average of 1.38%. The fund has five year returns of 2.1%.

American Century Global Gold Fund A Class (ACGGX - Free Report) aims for a total return that is on  par with its investment. The non-diversified fund invests the majority of its assets in companies that are involved in mining, processing, exploring and other related operations of gold.

This Zacks sector - Precious Metal product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

ACGGXhas a Zacks Mutual Fund Rank of #1 and an annual expense ratio of 0.93%, which is below the category average of 1.38%. The fund has five year returns of 6.2%.

USAA Precious Metals and Minerals Fund Adviser Shares (UPMMX - Free Report) targets capital appreciation and protects the purchasing power of capital against inflation. The fund does so by investing 80% of its assets in equity securities of U.S. and non-U.S. companies that are involved in mining and processing gold, precious metals and minerals etc.

This Zacks sector - Precious Metal product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

UPMMX has a Zacks Mutual Fund Rank of #2 and an annual expense ratio of 1.34%, which is below the category average of 1.38%. The fund has five year returns of 3.9%.

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