Major U.S. indexes like the Dow, the S&P 500 and the tech-heavy Nasdaq have returned 5.3%, 11.3% and 11.9%, respectively, over the year-to-date period. Although the consumer price index (CPI) eased in April for the first time after rising in the first three months of the 2024, the lack of a timeline from the central bank regarding interest rate cut initiation is weighing heavily on investors' sentiment.

According to the Bureau of Labor Statistics report on May 15,the Consumer Price Index (CPI) for the month of April increased 3.4% year over year and 0.3% month over month, slightly below the consensus estimate of 0.4%. Current CPI is still above the Federal Reserve’s ambitious target of 2% year over year. The Producer Price Index (PPI) increased 0.5%, surpassing the consensus estimate of 0.3% over the same period, indicating persistent inflationary pressure. The Fed, in its last meeting, kept the overnight interest rate unchanged in the range of 5.25-5.5% to bring the inflation down to its favored zone.

Also, the Department of Labor reported that initial jobless claims fell by 10,000 to 222,000 for the week ending May 11. The unemployment rate for April changed little at 3.9% and the average hourly earnings for all employees on private nonfarm payrolls increased by 0.2% to $34.75.

Investors who have disposable income and wish to diversify their portfolio can opt for no-load mutual funds. These passively managed funds don’t have any commission fees, or any other charges for buying and selling that are generally associated with actively managed funds.

The sales charges — referred to as a “front-end load,” which is charged upon purchasing shares, or “back-end load,” which is charged upon the selling of shares — are absent in such funds because shares are distributed directly by the investment company, instead of any third-party involvement like broker, advisor, or another type of professional. Even a few additional basis points saved in fees can boost the overall return by minimizing expenses. However, charges like the fund’s expense ratio, 12b-1 fees for marketing, distribution, and service, redemption fees, exchange fees, and account fees are commonly charged even if there is no load.

The load charges are generally within the range of 0-6%. To understand the math, let’s assume an investor wants to invest$1000 in a mutual fund that has a 5% entry and exit load. Then, $950 [$1000-$50 (5% of $1000)] is left with the mutual fund house to invest. Now, let’s assume the fund has given a 15% return over the year. So, the current value of the portfolio is $1092.5 [$950+ $142.5 (15% of $950)]. Now, when an exit load of 5% is applied, the investor is left with $1037.87 [$1092.5-$54.63 (5% of $1092.5)].

According to the above hypothesis, the return earned by the investor with front and back load is 3.78%, whereas he could have enjoyed a much higher return without load.

Wise investors looking for higher returns can consider no-load mutual funds as it has a low expense ratio, which can translate into higher returns along with other factors like the fund’s performance history, investment style, risk tolerance, etc.

We have thus selected five no-load mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive year-to-date (YTD), three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio of less than 1%. 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 Advisor Semiconductors (FIKGX Quick QuoteFIKGX - Free Report) fund invests most of its net assets in common stocks of domestic and foreign companies that areprincipally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FIKGX advisors choose to invest in stocks based on fundamental analysis factors like financial condition and industry position, along with market and economic conditions.

Adam Benjamin has been the lead manager of FIKGX since Mar 15, 2020. Most of the fund’s holdings were in companies like NVIDIA (24.8%), NXP Semiconductors (7.1%) and On Semiconductor (6.8%) as of Jan 31, 2024.

As of Apr 30, 2024, FIKGX’s YTD, three-year and five-year annualized returns are 23.5%, 26.6% and 31.2%, respectively. FIKGX has an annual expense ratio of 0.61%.

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

Fidelity Focused Stock (FTQGX Quick QuoteFTQGX - Free Report) fund invests most of its net assets in 30-80 common stocks of domestic and foreign companies with either growth or value stocks or sometimes both characteristics. FTQGX advisors choose to invest in stocks based on fundamental analysis factors such as financial condition, industry position, as well as market and economic conditions.

Stephen M DuFour has been the lead manager of FTQGX since Mar 12, 2007. Most of the fund’s holdings were in companies like Microsoft (8.9%), NVIDIA (7.8%) and Meta Platforms (6.8%) as of Jan 31, 2024.

As of Apr 30, 2024, FTQGX’s YTD, three-year and five-year annualized returns are 18.5%, 9.6% and 15.6%, respectively. FTQGX has an annual expense ratio of 0.51%.

Fidelity Select Pharmaceuticals Portfolio (FPHAX Quick QuoteFPHAX - Free Report) fund invests most of its net assets in common stocks of domestic and foreign companies that areengaged in the research, development, manufacture, sale, or distribution of pharmaceuticals and drugs of all types. FPHAX advisors choose to invest in stocks based on fundamental analysis factors such as financial condition, industry position, as well as market and economic conditions.

Karim Suwwan has been the lead manager of FPHAX since Jun 30, 2017. Most of the fund’s exposure was in companies like Eli Lilly (24.2%), Novo Nordisk (14.4%) and Astrazeneca (8.2%) as of Feb 29, 2024.

As of Apr 30, 2024, FPHAX’s YTD, three-year and five-year annualized returns are 16%, 11.6% and 14.4%, respectively. FPHAX has an annual expense ratio of 0.73%.

GQG Partners Global Quality Equity (GQRRX Quick QuoteGQRRX - Free Report) fund invests most of its assets along with borrowings, if any, in equity securities of domestic and foreign companies. GQRRX advisors prefer to diversify their investment in at least five countries, including the United States.

Rajiv Jain has been the lead manager of GQRRX since Mar 28, 2019. Most of the fund’s exposure was in companies like Meta Platforms (7.9%), NVIDIA (7.7%) and Microsoft (6.4%) as of Dec 31, 2023.

As of Apr 30, 2024, GQRRX’sYTD, three-year and five-year annualized returns are almost 13.7%, 12.9% and 14.3%%, respectively. GQRRX has an annual expense ratio of 0.71%.

DWS Science and Technology (KTCSX Quick QuoteKTCSX - Free Report) fund invests most of its assets along with borrowings, if any, incommon stocks and initial public offerings of domestic science and technology companies, irrespective of their market capitalization. KTCSX advisors may also invest in foreign companies from the technology sector or other industries within the technology sector from developed and emerging market economies.

Sebastian P. Werner has been the lead manager of KTCSX since Nov 30, 2017. Most of the fund’s exposure was in companies like NVIDIA (11%), Microsoft (10.3%) and Meta Platforms (8.7%) as of Jan 31, 2024.

As of Apr 30, 2024, KTCSX’s YTD, three-year, and five-year annualized returns of 12.7%, 8.3% and 18%, respectively. KTCSX has an annual expense ratio of 0.72%.

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