Yahoo Finance 3 Solid Growth Funds to Buy on the Ongoing Wall Street Rally
Wall Street has resumed its rally after a brief pause in April. On May 20, the Nasdaq ended at 16,974.87 points, registering its ninth record close this year. Last week, the Dow finished above the 40,000 mark for the first time in history. The S&P 500 is also trading above 5,300 points.
Wall Street had a solid 15-month run before concerns grew last month over the economy’s health as inflation rose in the first three months of the year. This saw all major indexes retreating slightly.
However, a spate of positive data, including a decline in inflation, has renewed investors’ confidence. The consumer price index (CPI) rose 0.3% sequentially in April, which was lower than the consensus estimate of a rise of 0.4%. Year over year, CPI increased 3.4%, which came in line with economists’ expectations.
Core CPI, which strips out the volatile energy and food prices, rose 0.3% sequentially in April after rising 0.4% in the first three months of 2024 and 3.6% from the year-ago levels, the lowest monthly increase since April 2021.
Also, a slowing economy and cooling labor market have raised hopes that the Federal Reserve could soon start its rate cuts. The U.S. GDP grew 1.6% in the first quarter compared to expectations of growth of 2.2% and sharply lower than the 3.4% growth registered in the fourth quarter of 2023.
The Federal Reserve said earlier this month that inflation is still above its 2% target but it’s unlikely that the central bank will go for further interest rate hikes.
Moreover, the Federal Reserve said that it still plans multiple rate cuts by the end of this year. Lower borrowing costs bode well for growth stocks and the broader economy.
3 Best Choices
We have, thus, selected three growth mutual funds such as Bridgeway Aggressive Investors BRAGX, Putnam Sustainable Leaders A PNOPX and Fidelity New Millennium Fund FMILX, carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), that are poised to gain from such 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).
Bridgeway Aggressive Investors fund invests most of its net assets in common stocks of companies irrespective of their size that are listed on the New York Stock Exchange, NYSE American and NASDAQ. BRAGX advisors may also invest in stocks for which there is relatively low market liquidity, as periodically determined by the adviser based on the stock's trading volume.
Bridgeway Aggressive Investors fund has a track of positive total returns for over 10 years. Specifically, BRAGX’s returns over the three and five-year benchmarks are 3.7% and 8.3%, respectively. BRAGX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.43%
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
Putnam Sustainable Leaders A fund seeks long-term capital appreciation. PNOPX invests mainly in common stocks of U.S. companies, with a focus on growth stocks in sectors of the economy that have high growth potential.
Putnam Sustainable Leaders A fund has a track of positive total returns for over 10 years. Specifically, PNOPX’s returns over the three and five-year benchmarks are 5.4% and 13%, respectively. PNOPX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.43%
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
Fidelity New Millennium Fund seeks capital appreciation. FMILX focuses on identifying industries and companies that will benefit from social and economic change by examining social attitudes, legislative actions, economic plans, product innovation, demographics and other factors, which can lead to investments in small and medium-sized companies.
Fidelity New Millennium Fund has a track of positive total returns for over 10 years. Specifically, FMILX’s returns over the three and five-year benchmarks are 12.5% and 14.1%, respectively. FMILX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.86%
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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