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3 Large-Cap Blend Mutual Funds to Sail Through an Edgy Market
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Uncertainties on Wall Street continue, as investors take ques from various domestic economic data. Though market sentiment has revived, the overall economic outlook remains cautious. The Federal Reserve has taken a pause from its aggressive rate hike stance in the June meeting. Yet, Fed chairman Jerome Powell’s hawkish tone remains.
The broader markets like the S&P 500, the Nasdaq and the Dow have posted positive returns of 14.0%, 29.9% and 2.1%, respectively, so far this year.
Current inflation for April is at 4.9%, which is higher than the Fed’s long-term expectation of 2%. Investors expect a half a percentage point increase in overnight interest rate, within this year. Though other key economic indicators like retail sales, manufacturing PMI, services PMI, industrial production and demand for loans have dried out in 2023, a strong labor market is still fueling inflation. Chairman Powell has talked tough on inflation and hinted at more restrictions. Many economists are of the opinion that such moves may push the U.S. economy into a shallow recession.
Meanwhile, global issues such as the ongoing Russia-Ukraine war and the struggling Chinese economy, will also have an indirect impact on global supply chains. The decision of the OPEC+ members to cut down on oil supply will also push oil prices higher, thereby increasing inflation rates.
Nevertheless, amid such uncertainty, it is prudent for investors to invest in large-cap blend mutual funds. These funds have large-cap companies with growth or value or both characteristics. Blend or hybrid funds provide significant exposure to both growth and value stocks and aim for value appreciation by capital gains.
Large-cap stocks are better choices than small or mid-cap stocks for risk-averse investors. These also have a long-term performance history and are more stable than their mid or small-cap counterparts. Companies with a market capitalization of more than $10 billion are generally considered large caps.
We have thus selected three large-cap blend mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio. 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 Mega Cap Stock Fund (FGRTX - Free Report) invests most of its net assets in common stocks of domestic and foreign mega market capitalization companies with a market cap similar to the companies listed on the Russell Top 200 Index or the S&P 100 Index at the time of purchase. FGRTX advisors generally invest in growth or value stocks or a combination of both characteristics. FGRTX advisors choose to invest in companies based on fundamental analysis factors such as financial condition, industry position, as well as market and economic conditions.
Matthew W. Fruhan has been the lead manager of FGRTX since Apr 9, 2009. Most of the fund’s exposure is in companies like Exxon Mobil (7.93%), Microsoft (7.62%) and Apple (4.96%) as of 3/31/2023.
FGRTX’s three-year and five-year annualized returns are nearly 17.4% and 11.7%, respectively. FGRTX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.62%, which is less than the category average of 0.84%.
To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
JPMorgan U.S. Equity Fund (JUSRX - Free Report) invests most of its assets along with borrowings, if any, in common stocks of large- and medium-capitalization U.S. companies. JUSRX advisors also invest a small portion of its net assets in common stocks of foreign companies, including depositary receipts.
Scott B. Davis has been the lead manager of JUSRX since Aug 18, 2014, and most of the fund’s exposure is in companies like Microsoft (7.53%), Alphabet (4.68%) and Apple (4.51%) as of 12/31/2022.
JUSRX’s three-year and five-year annualized returns are 13.7% and 12.3%, respectively. JUSRX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.54%, which is less than the category average of 0.84%.
T. Rowe Price U.S. Equity Research Fund (PRCOX - Free Report) invests most of its net assets, preferably in large-capitalization U.S. companies. PRCOX advisors invest in a diversified portfolio with distribution in each sector and industry similar to the S&P 500 Index.
Ann M. Holcomb has been the lead manager of PRCOX since Jan 1, 2015, and most of the fund’s exposure is in companies like Apple (5.86%), Microsoft (5.80%) and Amazon (2.38%) as of 12/31/2022.
PRCOX’s three-year and five-year annualized returns are 13.6% and 11.4%, respectively. PRCOX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.45% compared to the category average of 0.84%.
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3 Large-Cap Blend Mutual Funds to Sail Through an Edgy Market
Uncertainties on Wall Street continue, as investors take ques from various domestic economic data. Though market sentiment has revived, the overall economic outlook remains cautious. The Federal Reserve has taken a pause from its aggressive rate hike stance in the June meeting. Yet, Fed chairman Jerome Powell’s hawkish tone remains.
The broader markets like the S&P 500, the Nasdaq and the Dow have posted positive returns of 14.0%, 29.9% and 2.1%, respectively, so far this year.
Current inflation for April is at 4.9%, which is higher than the Fed’s long-term expectation of 2%. Investors expect a half a percentage point increase in overnight interest rate, within this year. Though other key economic indicators like retail sales, manufacturing PMI, services PMI, industrial production and demand for loans have dried out in 2023, a strong labor market is still fueling inflation. Chairman Powell has talked tough on inflation and hinted at more restrictions. Many economists are of the opinion that such moves may push the U.S. economy into a shallow recession.
Meanwhile, global issues such as the ongoing Russia-Ukraine war and the struggling Chinese economy, will also have an indirect impact on global supply chains. The decision of the OPEC+ members to cut down on oil supply will also push oil prices higher, thereby increasing inflation rates.
Nevertheless, amid such uncertainty, it is prudent for investors to invest in large-cap blend mutual funds. These funds have large-cap companies with growth or value or both characteristics. Blend or hybrid funds provide significant exposure to both growth and value stocks and aim for value appreciation by capital gains.
Large-cap stocks are better choices than small or mid-cap stocks for risk-averse investors. These also have a long-term performance history and are more stable than their mid or small-cap counterparts. Companies with a market capitalization of more than $10 billion are generally considered large caps.
We have thus selected three large-cap blend mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio. 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 Mega Cap Stock Fund (FGRTX - Free Report) invests most of its net assets in common stocks of domestic and foreign mega market capitalization companies with a market cap similar to the companies listed on the Russell Top 200 Index or the S&P 100 Index at the time of purchase. FGRTX advisors generally invest in growth or value stocks or a combination of both characteristics. FGRTX advisors choose to invest in companies based on fundamental analysis factors such as financial condition, industry position, as well as market and economic conditions.
Matthew W. Fruhan has been the lead manager of FGRTX since Apr 9, 2009. Most of the fund’s exposure is in companies like Exxon Mobil (7.93%), Microsoft (7.62%) and Apple (4.96%) as of 3/31/2023.
FGRTX’s three-year and five-year annualized returns are nearly 17.4% and 11.7%, respectively. FGRTX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.62%, which is less than the category average of 0.84%.
To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
JPMorgan U.S. Equity Fund (JUSRX - Free Report) invests most of its assets along with borrowings, if any, in common stocks of large- and medium-capitalization U.S. companies. JUSRX advisors also invest a small portion of its net assets in common stocks of foreign companies, including depositary receipts.
Scott B. Davis has been the lead manager of JUSRX since Aug 18, 2014, and most of the fund’s exposure is in companies like Microsoft (7.53%), Alphabet (4.68%) and Apple (4.51%) as of 12/31/2022.
JUSRX’s three-year and five-year annualized returns are 13.7% and 12.3%, respectively. JUSRX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.54%, which is less than the category average of 0.84%.
T. Rowe Price U.S. Equity Research Fund (PRCOX - Free Report) invests most of its net assets, preferably in large-capitalization U.S. companies. PRCOX advisors invest in a diversified portfolio with distribution in each sector and industry similar to the S&P 500 Index.
Ann M. Holcomb has been the lead manager of PRCOX since Jan 1, 2015, and most of the fund’s exposure is in companies like Apple (5.86%), Microsoft (5.80%) and Amazon (2.38%) as of 12/31/2022.
PRCOX’s three-year and five-year annualized returns are 13.6% and 11.4%, respectively. PRCOX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.45% compared to the category average of 0.84%.
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 >>