Markets have rebounded after a rough start to 2024. Wall Street is on a high once again after a solid 2023, with all three major indexes having officially entered the bull market last week.

The Dow, which hit a record high at the end of last year, ended at 37,863.80 points on Jan 19, while the Nasdaq finished at 15,310.97 points, also to hit a record high. The S&P 500 was the biggest gainer, recording its highest close since the January 2022 high and surpassing its earlier intraday high to settle at 4,839.81 points.

The S&P had lost 19% in 2022 as inflationary pressures took a toll on markets. The Nasdaq and the Dow, too, had a difficult 2022. However, stocks rebounded in 2023 amid inflationary pressures and the Federal Reserve’s aggressive monetary stance that saw it hiking interest rates by 525 basis points.

The rally in 2023 was led by tech stocks. This saw the S&P 500 gaining 24% last year. The S&P 500 is now up 35%, since its 2022 low.

Easing inflation has made economists believe that the economy will have a softer landing than expected earlier. Also, the Federal Reserve left its benchmark policy rate unchanged in the range of 5.25-5.5% in its last three FOMC meetings.

Besides, Federal Reserve Chairman Jerome Powell has said that the central bank will try not to keep interest rates higher for a longer period. Investors are now pricing in three 25-basis-point rate cuts this year.

Lower interest rates are advantageous for the stock market. A low-risk-free interest rate will result in a reduced discount rate, consequently causing an elevation in the net present value of investments in equities.

Given this situation, investors can bet on some top-ranked large-cap growth funds such as Fidelity Blue Chip Growth K6 (FBCGX Quick QuoteFBCGX - Free Report) , Schwab Select Large Cap Growth (LGILX Quick QuoteLGILX - Free Report) and Victory Aggressive Growth (USAUX Quick QuoteUSAUX - Free Report) .

3 Top Picks     

We have selected three large-cap mutual funds 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. Additionally, 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 Blue Chip Growth K6 fund invests most of its net assets in common stocks of blue-chip companies, according to Fidelity Management & Research Company LLC. FBCGX advisors generally choose to invest in large or medium market-capitalization companies.

Fidelity Blue Chip Growth K6 fund has a track of positive total returns for over 10 years. Specifically, FBCGX’s returns over the three and five-year benchmarks are 6% and 21.4%, respectively. The annual expense ratio of 0.46% is lower than the category average of 0.99%. FBCGX has a Zacks Mutual Fund Rank #1.

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

Schwab Select Large Cap Growth fund invests most of its assets in equity securities of large-cap companies. LGILX advisors also invest in foreign equity securities.

Schwab Select Large Cap Growth fund has a track of positive total returns for over 10 years. Specifically, LGILX’s returns over the three and five-year benchmarks are 3.3% and 15.1%, respectively. The annual expense ratio of 0.75% is lower than the category average of 0.99%. LGILX has a Zacks Mutual Fund Rank #1.

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

Victory Aggressive Growth fund seeks capital appreciation. USAUX invests primarily in the common stocks of large companies that are selected for their attractive growth potential. Up to 20% of the fund's total assets are invested in foreign securities purchased in either foreign or U.S. markets.

Victory Aggressive Growth fund has a track of positive total returns for over 10 years. Specifically, USAUX’s returns over the three and five-year benchmarks are 4% and 14.5%, respectively. The annual expense ratio of 0.53% is lower than the category average of 0.99%. USAUX has a Zacks Mutual Fund Rank #1.

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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