Last week was one of the most eventful for Wall Street this year. It started with a massive selloff led by fears of a recession. By the end of the week, all three major indexes made a remarkable comeback as the fears fizzled with fresh economic data reinstating investors’ confidence.

Last Monday’s violent rout followed disappointing July payrolls data that reignited fears of the economy heading toward a recession as market participants felt that the Federal Reserve may have delayed its rate cut plans for too long. The Dow shed more than 1,000 points on Aug 5, while the S&P 500 ended 3% lower to record its worst day since 2022.

The Federal Reserve increased interest rates by 525 basis points to take its benchmark policy rate to a 23-year-high in the range of 5.25-5.5% in its bid to fight decades-high inflation.

Although inflation has declined sharply over the past year, the Fed has been pushing back its planned rate cuts as inflation is still above its 2% target.

Last week’s selloff was led by tech stocks, which had so far been driving the market rally. Markets attempted to crawl back to normalcy on Tuesday and made a solid rebound on Thursday after fresh jobless data came in better than expected, easing some of the fears.

Markets have since recovered most of the losses, with the S&P 500 advancing 2.3% on Thursday to record its best day since November 2022.

The Federal Reserve is likely to begin rate cuts in September. Market participants are now pricing in a 50-basis-point rate cut in September, followed by a 75-basis-point rate cut combined in November and December.

3 Best Choices

We have, thus, selected three large-cap growth mutual funds, namely Fidelity Blue Chip Growth K6 (FBCGX Quick QuoteFBCGX - Free Report) , AB Large Cap Growth Fund (APGAX Quick QuoteAPGAX - Free Report) and Janus Henderson Research A (JRAAX Quick QuoteJRAAX - Free Report) , each carrying a Zacks Mutual Fund Rank #1 (Strong Buy). Each of these funds are poised to gain from the above 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 9.3% and 22.4%, 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.

 AB Large Cap Growth Fund seeks long-term growth of capital by investing in a limited number of large, carefully selected, high-quality U.S. companies. APGAX combines in-depth fundamental research on a company-by-company basis with opportunistic trading around core portfolio positions.

AB Large Cap Growth Fund has a track of positive total returns for over 10 years. Specifically, APGAX’s returns over the three and five-year benchmarks are 8.6% and 16.9%, respectively. APGAX has an annual expense ratio of 0.81% and a Zacks Mutual Fund Rank #2.

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

Janus Henderson Research A fund is part of the Large Cap Growth mutual fund category. JRAAX invests in many large U.S. companies that are expected to grow much faster than the other large-cap stocks.

Janus Henderson Research A fund has had a track of positive total returns for over 10 years. Specifically, JRAAX’s returns over the three and five-year benchmarks are 10.3% and 16.9%, respectively. The fund’s annual expense ratio is 0.81%. JRAAX 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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