Wall Street ended the first quarter on a high after a solid 2023. Stocks rallied as inflation declined sharply over the past year and optimism surrounding rate cuts gave investors’ confidence a boost.

The Dow, the S&P 500 and the Nasdaq gained 10.2% to record the best first quarter since 2019. The Dow finished the quarter up 5.6%, while the Nasdaq rallied 9.1%.

Understandably, investor sentiment is high despite inflation increasing marginally in the first two months of the year. The Federal Reserve adopted a strict monetary tightening policy and increased interest rates by 525 basis points to take its benchmark policy rate to the current range of 5.25-5.5%.

This saw inflation decline sharply from its peak of 9.1% in June 2022. Inflation is still marginally over 3%, which is above the Federal Reserve’s 2% target. However, the central bank hasn’t hiked interest rates since July 2023 and has indicated at least three rate cuts of 25 basis points each by the end of this year.

Moreover, the economy is also on solid ground. The nation’s economy grew at a robust pace of 3.4% in the fourth quarter and 2.5% in 2023.

Market participants are now expecting the first rate cut in June. Lower rates mean lower borrowing costs, which bode well for growth stocks.

3 Best Choices

We have, thus, selected three growth mutual funds, namely Fidelity Blue Chip Growth K6 (FBCGX Quick QuoteFBCGX - Free Report) , Davenport Equity Opportunities Fund (DEOPX Quick QuoteDEOPX - Free Report) and Janus Henderson Research A (JRAAX Quick QuoteJRAAX - Free Report) , carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain. Moreover, these funds have encouraging three and 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 in identifying potential winners and losers. Unlike most 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).

Fidelity Blue Chip Growth K6 fund invests most of its net assets in common stocks of blue-chip companies, according to Fidelity Management & Research Company LLC. FBCGX advisors generally choose to invest in large or medium market-capitalization companies.

Fidelity Blue Chip Growth K6 fund has a track of positive total returns for over 10 years. Specifically, FBCGX’s returns over the three and five-year benchmarks are 8.8% and 21%, respectively. Fidelity Blue Chip Growth K6 fund’s annual expense ratio is 0.45%. FBCGX has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.

Davenport Equity Opportunities Fund aims for long-term capital appreciation. DEOPX invests a large chunk of its assets in common stocks and shares of ETFs that invest primarily in common stocks.

Davenport Equity Opportunities Fund has a track of positive total returns for over 10 years. Specifically, DEOPX’s returns over the three and five-year benchmarks are 8.6% and 14.1%, respectively. Davenport Equity Opportunities Fund’s annual expense ratio is 0.88%. DEOPX has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.

Janus Henderson Research A fund is part of the Large Cap Growth mutual fund category. JRAAX invests in many large U.S. companies that are expected to grow much faster than the other large-cap stocks.

Janus Henderson Research A fund has had a track of positive total returns for over 10 years. Specifically, JRAAX’s returns over the three and five-year benchmarks are 10.7% and 16.2%, respectively. The fund’s annual expense ratio is 0.81%. JRAAX has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.

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