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3 Large-Cap Growth Funds to Gain From Fed's Upcoming Rate Cut
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Wall Street is upbeat ahead of the Federal Reserve’s much-awaited two-day policy meeting that begins today. The financial community is hopeful that the central bank will go for a rate cut, the first since March 2020.
The enthusiasm surrounding rate cuts has seen markets rallying over the past week after a rocky start to September, which is considered one of the worst months for stocks. Investing in large-cap growth funds will thus be a prudent choice to earn profits in the near term. Three such funds are Fidelity Series Blue Chip Growth Fund (FSBDX - Free Report) , MassMutual Disciplined Gr Svc (DEIGX - Free Report) and Janus Henderson Research A (JRAAX - Free Report) .
Rate Cuts to Boost Growth Funds
Monthly inflation rose slightly in August but that hasn’t dampened investors’ sentiment. Consumer price index (CPI) rose 0.2% sequentially in August. However, the inflation rate fell to its lowest level since February 2021.
The Federal Reserve delayed its rate cuts after inflation unexpectedly rose in the first quarter. However, the central bank is now confident that inflation, after showing signs of cooling in the second quarter, is on track to reach its 2% target.
The CME FedWatch tool shows a 100% probability of a 25-basis point cut this week, while a 50% chance of a 50-basis point cut.
A rate cut of any size bodes well for the broader economy and especially growth-oriented assets such as technology and consumer discretionary sectors. This is because growth-oriented assets have an inverse relationship with market interest rates. When rates are lower, these assets often rise because the cost of holding non-yielding assets like consumer discretionary stocks decreases.
3 Best Large-Cap Growth Funds With Upside
We have selected three such large-cap growth funds that are poised to gain from the above factors. Moreover, these funds have encouraging three and five-year returns. 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 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).
Fidelity Series Blue Chip Growth Fund invests in common stocks of blue-chip companies that generally have large or medium-market capitalization. FSBDX is non-diversified.
Fidelity Series Blue Chip Growth Fund has a track of positive total returns for over 10 years. Specifically, FSBDX’s returns over the three and five-year benchmarks are 7.8% and 22.3%, respectively. FSBDX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.01%.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
MassMutual Disciplined Gr Svc fund seeks to outperform the total return performance of its benchmark index, the Russell 1000 Growth Index, while maintaining risk characteristics similar to those of the benchmark. DEIGX invests substantially all (but no less than 80%) of its net assets in common stocks of companies included in the fund's benchmark index.
MassMutual Disciplined Gr Svc has a track of positive total returns for over 10 years. Specifically, DEIGX’s returns over the three and five-year benchmarks are 7.1% and 17%, respectively. DEIGX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.79%.
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 8.5% and 16.8%, respectively. JRAAX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.83%.
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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3 Large-Cap Growth Funds to Gain From Fed's Upcoming Rate Cut
Wall Street is upbeat ahead of the Federal Reserve’s much-awaited two-day policy meeting that begins today. The financial community is hopeful that the central bank will go for a rate cut, the first since March 2020.
The enthusiasm surrounding rate cuts has seen markets rallying over the past week after a rocky start to September, which is considered one of the worst months for stocks. Investing in large-cap growth funds will thus be a prudent choice to earn profits in the near term. Three such funds are Fidelity Series Blue Chip Growth Fund (FSBDX - Free Report) , MassMutual Disciplined Gr Svc (DEIGX - Free Report) and Janus Henderson Research A (JRAAX - Free Report) .
Rate Cuts to Boost Growth Funds
Monthly inflation rose slightly in August but that hasn’t dampened investors’ sentiment. Consumer price index (CPI) rose 0.2% sequentially in August. However, the inflation rate fell to its lowest level since February 2021.
The Federal Reserve delayed its rate cuts after inflation unexpectedly rose in the first quarter. However, the central bank is now confident that inflation, after showing signs of cooling in the second quarter, is on track to reach its 2% target.
The CME FedWatch tool shows a 100% probability of a 25-basis point cut this week, while a 50% chance of a 50-basis point cut.
A rate cut of any size bodes well for the broader economy and especially growth-oriented assets such as technology and consumer discretionary sectors. This is because growth-oriented assets have an inverse relationship with market interest rates. When rates are lower, these assets often rise because the cost of holding non-yielding assets like consumer discretionary stocks decreases.
3 Best Large-Cap Growth Funds With Upside
We have selected three such large-cap growth funds that are poised to gain from the above factors. Moreover, these funds have encouraging three and five-year returns. 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 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).
Fidelity Series Blue Chip Growth Fund invests in common stocks of blue-chip companies that generally have large or medium-market capitalization. FSBDX is non-diversified.
Fidelity Series Blue Chip Growth Fund has a track of positive total returns for over 10 years. Specifically, FSBDX’s returns over the three and five-year benchmarks are 7.8% and 22.3%, respectively. FSBDX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.01%.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
MassMutual Disciplined Gr Svc fund seeks to outperform the total return performance of its benchmark index, the Russell 1000 Growth Index, while maintaining risk characteristics similar to those of the benchmark. DEIGX invests substantially all (but no less than 80%) of its net assets in common stocks of companies included in the fund's benchmark index.
MassMutual Disciplined Gr Svc has a track of positive total returns for over 10 years. Specifically, DEIGX’s returns over the three and five-year benchmarks are 7.1% and 17%, respectively. DEIGX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.79%.
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 8.5% and 16.8%, respectively. JRAAX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.83%.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
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 >>