Yahoo Finance 5 Top-Ranked Mutual Funds That Have Outshined S&P 500 YTD
Major U.S. indexes like the S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average have given positive returns of 15%, 19% and 3.9%, respectively, in the year-to-date (YTD) period.
The Consumer Price Index (CPI) resumed its downward trend at the start of Q2. CPI for the month of May remained unchanged afterrising 0.3% in April. However, the Wall Street expectation was of a 0.1% monthly increase. Owing to lower energy costs, PPI fell unexpectedly by 0.2% in comparison to 0.5% in April. The downtrend in both inflation numbers indicates that inflation is slowly cooling, bringing some relief for investors.
The Federal Reserve has kept benchmark interest rates unchanged in the range of 5.25-5.50% even after an improvement in May inflation numbers. Benchmark interest rates remained unchanged for the seventh time in a row. The Fed wants to continue with its “higher for longer” policy to meet its inflation target of 2%.
The Department of Commerce has revised its final Q1 GDP growth rate estimate to 1.4% from 1.3% reported earlier. The Department of Labor reported that initial claims decreased by 6,000 to 233,000 for the week ended Jun 22, indicating a still resilient U.S. labor market. Continuing claims increased 18,000 to 1.839 million for the week ended Jun 15.
To get relief from the 23-year high interest rate, investors want the central bank to initiate an interest rate cut, but Fed Chair Jerome Powell, in his comments, said that the central bank does not yet have the confidence to start lowering interest rates and forecast one rate cut this year.
In such a volatile situation, mutual fund investing can help those who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds. We have thus selected five mutual funds that have outperformed the S&P 500 Index YTD. These funds have not only preserved investors’ wealth but have also generated excellent returns in the past. These funds have most of their investments in sectors like technology, industrial cyclical, finance, retail trade, consumer durables and others, which are expected to perform well in the future.
These funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive YTD, three-year and five-year annualized returns, and 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 Select Semiconductors Portfolio FSELX 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. FSELX 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 FSELX since Mar 15, 2020. Most of the fund’s exposure was in companies like NVIDIA (24.1%), NXP Semiconductors (7.7%) and ON Semiconductors (7%) as of Feb 29, 2024.
FSELX’s YTD return is 44.9%, which has easily surpassed the S&P 500’s gain of 15%. FSELX’s three-year and five-year annualized returns are almost 31% and 40.3%, respectively. FSELX has an annual expense ratio of 0.67%.
To see how this fund performed compared to its category and other 1, 2, and 3 Ranked Mutual Funds, please click here.
Fidelity Focused Stock FTQGX 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.
FTQGX’s YTD, three-year and five-year returns are almost 30.6%, 11.9% and 18.5%, respectively. FTQGX has an annual expense ratio of 0.51%.
PGIM Jennison Technology PGKRX fund invests most of its assets, along with borrowings, if any, in equity and equity-related securities of technology or technology-related companies. PGKRX advisors may also invest in the initial public offering market.
Nick Rubinstein has been the lead manager of PGKRX since Jun 18, 2018. Most of the fund’s exposure was in companies like NVIDIA (11.9%), Broadcom (10.7%) and Microsoft (9.8%) as of Jan 31, 2024.
PGKRX’s YTD, three-year and five-year returns are almost 29.6%, 12.6%, and 22.2%, respectively. PGKRX has an annual expense ratio of 0.82%.
Gabelli Global Growth GGGAX fund invests most of its net assets in common stocks of companies that, according to its portfolio manager, are undervalued or have the potential for above-average capital appreciation. GGGAX advisors also invest a small portion of its net assets in issues of foreign companies.
Caesar M.P. Bryan has been the lead manager of GGGAX since Dec 30, 2000, and most of the fund’s exposure was in companies like Microsoft (6.1%), Amazon.com (5.6%) and NVIDIA (5.3%) as of Dec 31, 2023.
GGGAX’s YTD, three-year and five-year returns are almost 25.2%, 5.3% and 13.3%, respectively. GGGAX has an annual expense ratio of 0.90%.
MFS Growth MFEKX fund invests most of its net assets in common stocks and other securities that represent an ownership interest. MFEKX advisors generally invest in stocks of companies that have above-average earnings growth potential compared to other companies.
Bradford J. Mak has been the lead manager of MFEKX since Jun 29, 2001, and most of the fund’s exposure was in companies like Microsoft (14.1%), NVIDIA (8.4%) and Amazon.com (6.7%) as of Feb 29, 2024.
MFEKX’s YTD, three-year and five-year returns are almost 25.4%, 8.6% and 16.1%, respectively. MFEKX has an annual expense ratio of 0.50%.
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