Wall Street has faced heightened volatility in September as investors grappled with surging oil prices, elevated Treasury yields, persistent inflation and changing Federal Reserve expectations. The Middle East conflict has intensified concerns over energy supplies, pushing Brent crude above $100 per barrel at times. The 10-year Treasury yield briefly topped 5%, raising fears that higher energy and borrowing costs could prolong inflation and keep monetary policy restrictive.

The turbulence intensified around the Fed’s September meeting, when the central bank raised interest rates by 25 basis points, its first hike in more than three years, while signaling that further tightening could remain necessary. The Dow fell 1.69% in the week ended Sept. 18, its steepest weekly decline since March, while the S&P 500 slipped 0.10%. The Nasdaq, however, gained 0.72%, underscoring the divergence across market segments.

Rapid swings in oil prices and Treasury yields have fueled sharp rotations across market segments. Against this backdrop, emerging-market funds have benefited from strength in key Asian markets and technology holdings, while gold and precious metals funds have gained from inflation concerns and geopolitical uncertainty. Energy funds have also benefited from elevated crude prices and persistent supply risks, highlighting the relative resilience of these themes amid heightened market volatility.

Against this backdrop, ClearBridge SMASh Series EM Fund (LCSMX Quick QuoteLCSMX - Free Report) , Fidelity Select Gold Portfolio (FSAGX Quick QuoteFSAGX - Free Report) , Franklin Gold and Precious Metals Fund Advisor (FGADX Quick QuoteFGADX - Free Report) and Fidelity Select Energy Portfolio (FSENX Quick QuoteFSENX - Free Report) provide exposure to several areas demonstrating relative strength. These boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000, and carry a low expense ratio.

Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

ClearBridge SMASh Series EM Fund has gained 53.2% year to date, helped by exposure to South Korea, India and Taiwan and holdings such as SK hynics and Samsung Electronics.LCSMX’s 3-year and 5-year annualized returns are 27.3% and 9.6%, respectively. Its net expense ratio is 0.1%. LCSMXhas a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

Gold and precious metals funds have benefited from inflation and geopolitical uncertainty. Fidelity Select Gold Portfolio, with a #1 Rank, rose 15.8% year to date, while Franklin Gold and Precious Metals Fund Advisor, also ranked #1, returned 12.1%. Both provide exposure to miners and precious metals companies, which can attract investors amid macro risks. FSAGX and FGADX have net expense ratios of 0.64% and 0.58%, respectively. While FSAGX has 3-year and 5-year annualized returns of 50.2% and 23%, FGADX boasts returns of 61.8% and 27.2%, respectively.

Energy remains another key theme. Fidelity Select Energy Portfolio, ranked #1, gained 47.4% year to date through Sept. 21. Its concentration in oil, gas and related companies has helped it capitalize on elevated crude prices and supply concerns.

FSENX has a net expense ratio of 0.64%. The fund also carries 3-year and 5-year annualized returns of 18.2% and 27.8%, respectively.

Bottom Line

These four top-ranked mutual funds provide diversified exposure to emerging markets, precious metals and energy, areas that have shown resilience amid elevated inflation, geopolitical tensions and persistent market volatility.

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