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4 Mutual Funds to Buy Amid Ongoing Market Volatility
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The concerns surrounding economic instability and market volatility have grown. Moody and Fitch, issued a warning about the looming risk of a U.S. government shutdown, underscoring the fragility of the economy.
The Conference Board has reported a decline in the index that measures economic activity. The September reading decreased to 103 from the August reading of 108.7. This unexpected fall was concerning. The reading fell short of the consensus estimate of 105.5. In addition, the Federal Reserve’s current projections shown in the dot plot, there is a strong likelihood of one more rate hike of 25 basis points in 2023.
Amid the uncertainty, utility and health mutual funds emerge as reliable investment options. Utility mutual funds focus on vital services such as electricity, gas, and water, offering stability in times of economic downturns.
Health mutual funds focus on the resilient healthcare sector. These funds offer a diversified portfolio that includes pharmaceuticals, biotechnology and healthcare providers, allowing them to benefit from the unwavering demand in the sector. These sectors are less sensitive to interest rate changes and shifts in consumer sentiment. As a result, they can be considered relatively safer options for investments.
These funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive year-to-date, three-year, and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio compared to the category average. Notably, 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 Select Utilities Fund (FSUTX - Free Report) seeks capital appreciation by investing in common stocks of companies principally engaged in utility industries and companies deriving the majority of their revenues from utility operations.
Douglas Simmons has been the lead manager of FSUTX since Oct 1, 2006. Most of the fund’s holdings were in companies like NextEra Energy, Inc (14.8%), The Southern Co (13.2%) and Sempra (7%) as of May 31, 2023.
FSUTX’s 3-year and 5-year annualized returns are 9.8% and 7.2%, respectively. Its net expense ratio is 0.74% compared with the category average of 0.94%. FSUTX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds, please click here.
Franklin Utilities Fund (FRUAX - Free Report) seeks capital appreciation and current income by investing the majority of its net assets in the public utility sector with a focus on electricity companies. FRUAX invests mostly in equity securities but may invest a small portion of its assets in debt securities.
John Kohli has been the lead manager of FRUAX since Dec 30, 1998. Most of the fund’s holdings were in companies like NextEra Energy, Inc. (11.7%), The Southern Co (5%) and Edison International (4.8%) as of Jun 30, 2023.
FRUAX’s3-year and 5-year annualized returns are 6.2% and 6.9%, respectively. FRUAX has an annual expense ratio of 0.55%, which is less than the category average of 0.94%.FRUAX has a Zacks Mutual Fund Rank #2.
Janus Henderson Global Life Sciences Fund (JNGLX - Free Report) invests the majority of its assets in securities of companies that demonstrate a life science orientation, including any investment-related borrowings in its net assets.
Andy Acker has been the lead manager of JNGLX since Apr 30, 2007. Most of the fund’s holdings were in UnitedHealth Group Inc (6.1%), AstraZeneca PLC (4.2%) and Eli Lilly and Co (3.7%) as of Jun 30, 2022.
JNGLX’s 3-year and 5-year annualized returns are 6.6% and 8.7%, respectively. Its net expense ratio is 0.80% compared with the category average of 1.03%. JNGLX has a Zacks Mutual Fund Rank #1.
T. Rowe Price Health Sciences Fund (PRHSX - Free Report) seeks long-term capital growth by investing its net assets into common stocks of businesses engaged in healthcare, medicine, or the life sciences, including those that conduct related research, develop, produce, or distribute related goods and services.
Ziad Bakri has been the lead manager of PRHSX since Mar 31 2016. Most of the fund’s holdings were in UnitedHealth Group Inc (7.1%), Eli Lilly and Co (6.1%) and Thermo Fisher Scientific Inc. (4.5%) as of Jun 30, 2023.
PRHSX’s 3-year and 5-year annualized returns are 4.6% and 7.2%, respectively. Its net expense ratio is 0.80% compared with the category average of 1.03%. PRHSX has a Zacks Mutual Fund Rank #2.
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4 Mutual Funds to Buy Amid Ongoing Market Volatility
The concerns surrounding economic instability and market volatility have grown. Moody and Fitch, issued a warning about the looming risk of a U.S. government shutdown, underscoring the fragility of the economy.
The Conference Board has reported a decline in the index that measures economic activity. The September reading decreased to 103 from the August reading of 108.7. This unexpected fall was concerning. The reading fell short of the consensus estimate of 105.5. In addition, the Federal Reserve’s current projections shown in the dot plot, there is a strong likelihood of one more rate hike of 25 basis points in 2023.
Amid the uncertainty, utility and health mutual funds emerge as reliable investment options. Utility mutual funds focus on vital services such as electricity, gas, and water, offering stability in times of economic downturns.
Health mutual funds focus on the resilient healthcare sector. These funds offer a diversified portfolio that includes pharmaceuticals, biotechnology and healthcare providers, allowing them to benefit from the unwavering demand in the sector. These sectors are less sensitive to interest rate changes and shifts in consumer sentiment. As a result, they can be considered relatively safer options for investments.
These funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive year-to-date, three-year, and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio compared to the category average. Notably, 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 Select Utilities Fund (FSUTX - Free Report) seeks capital appreciation by investing in common stocks of companies principally engaged in utility industries and companies deriving the majority of their revenues from utility operations.
Douglas Simmons has been the lead manager of FSUTX since Oct 1, 2006. Most of the fund’s holdings were in companies like NextEra Energy, Inc (14.8%), The Southern Co (13.2%) and Sempra (7%) as of May 31, 2023.
FSUTX’s 3-year and 5-year annualized returns are 9.8% and 7.2%, respectively. Its net expense ratio is 0.74% compared with the category average of 0.94%. FSUTX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds, please click here.
Franklin Utilities Fund (FRUAX - Free Report) seeks capital appreciation and current income by investing the majority of its net assets in the public utility sector with a focus on electricity companies. FRUAX invests mostly in equity securities but may invest a small portion of its assets in debt securities.
John Kohli has been the lead manager of FRUAX since Dec 30, 1998. Most of the fund’s holdings were in companies like NextEra Energy, Inc. (11.7%), The Southern Co (5%) and Edison International (4.8%) as of Jun 30, 2023.
FRUAX’s3-year and 5-year annualized returns are 6.2% and 6.9%, respectively. FRUAX has an annual expense ratio of 0.55%, which is less than the category average of 0.94%.FRUAX has a Zacks Mutual Fund Rank #2.
Janus Henderson Global Life Sciences Fund (JNGLX - Free Report) invests the majority of its assets in securities of companies that demonstrate a life science orientation, including any investment-related borrowings in its net assets.
Andy Acker has been the lead manager of JNGLX since Apr 30, 2007. Most of the fund’s holdings were in UnitedHealth Group Inc (6.1%), AstraZeneca PLC (4.2%) and Eli Lilly and Co (3.7%) as of Jun 30, 2022.
JNGLX’s 3-year and 5-year annualized returns are 6.6% and 8.7%, respectively. Its net expense ratio is 0.80% compared with the category average of 1.03%. JNGLX has a Zacks Mutual Fund Rank #1.
T. Rowe Price Health Sciences Fund (PRHSX - Free Report) seeks long-term capital growth by investing its net assets into common stocks of businesses engaged in healthcare, medicine, or the life sciences, including those that conduct related research, develop, produce, or distribute related goods and services.
Ziad Bakri has been the lead manager of PRHSX since Mar 31 2016. Most of the fund’s holdings were in UnitedHealth Group Inc (7.1%), Eli Lilly and Co (6.1%) and Thermo Fisher Scientific Inc. (4.5%) as of Jun 30, 2023.
PRHSX’s 3-year and 5-year annualized returns are 4.6% and 7.2%, respectively. Its net expense ratio is 0.80% compared with the category average of 1.03%. PRHSX has a Zacks Mutual Fund Rank #2.
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 >>