Back to top

Image: Bigstock

3 Equity Funds Riding High on Strong Inflows in March

Read MoreHide Full Article

The coronavirus pandemic may have wrecked havoc on broader markets over the past few months. But fund investors managed to retain some of their confidence, as evident from the extended inflows into mutual funds since March. To be precise, long-term U.S. equity funds have garnered impressive inflows since March, with investments extending into April.

Investors who wish to gain from these strong inflows into equity mutual funds could thus consider investing in some themselves.

Stock Funds Witness a Streak of Inflows

Per a Morningstar report, long-term U.S. equity funds witnessed $10.5 billion in net inflows during March. In fact, passively managed equity funds were responsible for bringing in as much as $41 billion.

Equity mutual funds weren’t the only ones with such impressive gains. According to Lipper data, investors put in record amounts into high-yield corporate bonds and broke a six-week losing streak for investment-grade debt in the third week of April, when market turbulence slowly began to subside.

The strong push into the financial markets came as the broader S&P 500 index started to rake in gains. In fact, inflows of a little more than $8.8 billion made their way into mutual and exchange-traded funds that investd in U.S. stocks from the first week of April through mid-last month.

The S&P 500 index’s upward movement was a result of the Federal Reserve’s intervention into the bond market, the Congress’ stimulus plans and indications of a slowdown in the number of infections in the country.

3 Best Equity Funds to Buy

We have, therefore, selected three equity mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). In addition, the minimum initial investment for these funds is within $5,000.

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

Putnam Global Technology Fund Class A (PGTAX - Free Report) aims for capital appreciation. The fund invests the majority of its assets in securities of large and mid-size companies from the technology industry. PGTAX is a non-diversified fund.

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

PGTAX has an annual expense ratio of 1.16%, which is below the category average of 1.29%. The fund has returned 13.6% over the past year. PGTAX has a minimum initial investment of $500.

Fidelity Select Pharmaceuticals Portfolio (FPHAX - Free Report) fund aims for capital growth. The fund invests the majority of its assets in securities of companies engaged in various activities in the pharmaceutical industry. The non-diversified fund invests in securities of both U.S. and non-U.S. issuers. FPHAX mostly invests in common stocks of companies.

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

FPHAX has an annual expense ratio of 0.78%, which is below the category average of 1.24%. The fund has returned 6.7% over the past year. FPHAX has no minimum initial investment.

Natixis ASG Managed Futures Strategy Fund Class A (AMFAX - Free Report) aims to offer capital growth. The fund invests the majority of its assets in securities of issuers in the financial services industry. The fund also invests a minority of its assets in initial and variation margin payments related to the fund's derivative transactions.

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

AMFAX has an annual expense ratio of 1.70%, which is below the category average of 1.79%. The fund has returned 13.5% over the past year. AMFAX has a minimum initial investment of $2500.

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 >>

Published in