The Federal Reserve, at its Jun 12 Federal Open Market Committee (FOMC) meeting, said that it sees only one rate cut this year, down from the three expected rate cuts earlier this year. Also, it didn’t give any timeline for the first rate cut.

However, the Fed held its benchmark policy rate steady at the current range of 5.25-5.5% in the FOMC meeting.

The decision was highly expected and was cheered by investors as Wall Street continued its rally on Wednesday.

Wall Street had a solid first quarter, with all three major indexes hitting record highs. However, it took a brief pause in April over concerns that the Federal Reserve could increase interest rates instead of going for rate cuts as inflation surged in the first three months of the year.

However, the fears were alleviated after inflation finally showed signs of cooling in April. On Jun 12, investors’ confidence got a further boost after fresh data showed that inflation continued to ease in May.

The Labor Department reported that the consumer price index (CPI) remained flat in May on a month-over-month basis, following a 0.3% increase in April.

May's figure was also 0.1% below the consensus estimate and the lowest since July 2022.

Year over year, the CPI increased by 3.3%, slightly below analysts' expectation of a 3.4% rise. Core CPI, which excludes the volatile food and energy prices, climbed 0.2% month over month and 3.4% year over year, both below the consensus estimate of 0.3% and 3.5%, respectively.

Inflation has eased its hold on the economy over the past two months, which has raised hopes that the Federal Reserve could go for the first rate cut in September. Lower borrowing rates bode well for the broader economy.

3 Best Choices

We have, thus, selected three large-cap mutual funds such as Fidelity Blue Chip Growth K6 (FBCGX Quick QuoteFBCGX - Free Report) , T. Rowe Price Blue Chip Growth (TRBCX Quick QuoteTRBCX - Free Report) and Nuveen Winslow Large-Cap Growth ESG Fund (NVLIX Quick QuoteNVLIX - Free Report) , 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).

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 6.6% and 18.9%, respectively. FBCGX has an annual expense ratio of 0.45% and 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.

T. Rowe Price Blue Chip Growth fund seeks long-term capital growth. TRBCX invests at least 80% of net assets in common stocks of large and medium-sized, blue-chip companies that have the potential for above-average growth in earnings and are well-established in their respective industries.

T. Rowe Price Blue Chip Growth fund has a track of positive total returns for over 10 years. Specifically, TRBCX’s returns over the three and five-year benchmarks are 3.1% and 11.4%, respectively. The fund has an annual      expense ratio of 0.70%, which is lower than the category average of 0.96%. TRBCX 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.

Nuveen Winslow Large-Cap Growth ESG Fund seeks current income exempt from federal income taxes. NVLIX invests in investment-grade municipal securities with average maturities between one and five years.

Nuveen Winslow Large-Cap Growth ESG Fund has a track of positive total returns for over 10 years. Specifically, NVLIX’s returns over the three and five-year benchmarks are 7.9% and 15.5%, respectively. The fund has an annual expense ratio of 0.66%. NVLIX 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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