Volatility on Wall Street continues mostly due to July and August Consumer Price Index data, which moved up 3.2% and 3.7% year on year. Inflation rates saw a decline till June at 3% after Federal Reserves’ aggressive rate hike stance for 11 times since March 2022. To meet its 2% inflation target over the long run, the Fed has kept the overnight interest rate unchanged in its recent policy meeting in the 5.25-5.5% range, which is the highest in more than 22 years.
The recent increase in inflation is mostly due to a rise in crude oil prices. An increase in oil demand amid tighter supply has pushed oil prices to a 10-month high. OPEC+ members have decided to cut oil supply by 1.3 million barrels per day till the end of 2023. Analysts are expecting crude prices to reach $100/barrel.
August retail sales rose 0.6% from a 0.5% increase in July. A strong labor market is still fueling inflation and the Fed expects further easing to get rid of sticky inflation. The Bureau of Labor Statistics has stated that 187,000 jobs were added in the month of August, while unemployment unexpectedly rose to 3.8%, the highest since February 2022. Chairman Powell has still left the doors open for further rate hikes this year, if necessary. But a prolonged high interest rate, which Americans are not used to,may push various industries and the overall economy into a recession.
Nevertheless, amid such volatile market conditions, prudent investors can take refuge in large-cap blend mutual funds to preserve their capital and earn positive returns. These funds have large-cap companies with growth or value or both characteristics. Blend or hybrid funds provide significant exposure to both growth and value stocks and aim for value appreciation by capital gains.
Large-cap stocks are better choices than small or mid-cap stocks for risk-averse investors. These also have a long-term performance history and proven business models and provide more stability than mid or small-cap companies. Companies with a market capitalization of more than $10 billion are generally considered large caps.
We have thus selected four large-cap blend mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio compared to the category average. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more:
Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money). Fidelity Growth & Income ( FGIKX Quick Quote FGIKX - Free Report) fund invests most of its net assets in common stocks of domestic and foreign companies that pay out dividends and have the potential for capital appreciation. FGIKX advisors also choose to invest in other instruments like bonds and lower-quality debt securities, otherwise known as junk bonds.
Matthew W. Fruhan has been the lead manager of FGIKX since Feb 3, 2011. Most of the fund’s exposure is in companies like Exxon Mobil (8.1%), Microsoft (7.1%) and Wells Fargo (5.3%) as of 4/30/2023.
FGIKX’s three-year and five-year annualized returns are nearly 14.8% and 10.1%, respectively. FGIKX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.49%, which is less than the category average of 0.84%.
To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds,
please click here. Voya Growth and Income Portfolio ( IIVGX Quick Quote IIVGX - Free Report) fund invests most of its net assets in common stocks. IIVGX advisors choose to invest in companies with a high potential for capital appreciation, income growth, or both.
Vincent J. Costa has been the lead manager of IIVGX since Jun 29, 2013, and most of the fund’s exposure is in companies like Apple (8.9%), Microsoft (8.3%) and Amazon.com (4.8%) as of 6/30/2023.
IIVGX’s three-year and five-year annualized returns are 13.3% and 11.8%, respectively. IIVGX has an annual expense ratio of 0.66%.
T. Rowe Price U.S. Equity Research Fund ( PRCOX Quick Quote PRCOX - Free Report) invests most of its net assets in a portfolio of stocks where the weight of each sector and industry is approximately the same as in Standard & Poor's 500 Stock Index. PRCOX advisors prefer to invest in large-capitalization domestic companies but can also invest in foreign issues with a similar objective.
Jason B. Polun has been the lead manager of PRCOX since Dec 31, 2014, and most of the fund’s exposure is in companies like Apple (7.8%), Microsoft (7.1%) and NVIDIA (3.4%) as of 6/30/2023.
PRCOX’s three-year and five-year annualized returns are 11.0% and 11.6%, respectively. PRCOX has an annual expense ratio of 0.45%.
JPMorgan U.S. Equity Fund ( JUSRX Quick Quote JUSRX - Free Report) invests most of its assets along with borrowings, if any, in common stocks of large- and medium-capitalization U.S. companies. JUSRX advisors also invest a small portion of its net assets in common stocks of foreign companies, including depositary receipts.
Scott B. Davis has been the lead manager of JUSRX since Aug 18, 2014, and most of the fund’s exposure is in companies like Microsoft (9.6%), Apple (6.0%) and NVIDIA (3.8%) as of 6/30/2023.
JUSRX’s three-year and five-year annualized returns are 10.7% and 12.3%, respectively. JUSRX has an annual expense ratio of 0.54%.
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