3 Mutual Funds to Grab on S&P 500's Continued Rally

Yahoo

3 days ago

Wall Street's rally gained momentum on Tuesday, with the S&P 500 and the Nasdaq both closing at fresh record highs after new data showed inflation rose less than expected. The S&P 500, in particular, has had an impressive run this year.
After nearly slipping into a bear market in April, the index has staged a robust recovery and has been setting new records over the past month. The latest surge is fueled by renewed confidence in potential interest rate cuts and heavy domestic investments in the tech sector.
Given the upbeat sentiment, it would be ideal to consider investing in large-cap growth funds. Three such funds are: T. Rowe Price Lrg Cp Gr I TRLGX, JPMorgan U.S. GARP Equity I JPGSX and Fidelity Contrafund FCNTX.
S&P 500 Hits Another Milestone
On Tuesday, the S&P 500 climbed 1.1% to close at 6,445.76 points, setting its seventh record close in less than a month and its 16th for the year.
The rally gathered steam after CPI data suggested that inflation rose just 0.2% in July, down from 0.3% in May and below the consensus estimate of a 0.3% rise. Year over year, CPI advanced 2.7%, also below economists' expectations of a rise of 2.8%.
Core CPI, which excludes the volatile food and energy prices, was up 0.3% in July, matching expectations, while the annual core figure came in at 3.1%, marginally above the consensus estimate of a rise of 3%.
Concerns had been mounting that President Donald Trump's tariffs could drive up prices and slow the economy, but the softer inflation reading eased those worries and boosted hopes for a September rate cut. Following the report, markets priced in a 94% probability of a 25-basis-point cut, up from 85% before the release.
Investor Confidence Boosting the S&P 500
This year has been a rollercoaster for the S&P 500. After hitting a record high in February on optimism over Trump's pro-business stance, the index plunged in April when his administration introduced sweeping tariffs, sparking fears of a trade war.
By April, it had fallen nearly 18% for the year, coming close to bear market territory. The rebound started after Trump paused tariffs, initiated talks with U.S. trade partners, and finalized trade deals with multiple countries. Since then, the index has been on a steady climb, gaining 2.8% in the past month and 9.6% so far this year.
Large-Cap Growth Funds With Upside
We have selected three large-cap growth funds that 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).
T. Rowe Price Lrg Cp Gr I fund seeks to provide long-term capital appreciation through investments in common stocks of growth companies. TRLGX normally invests at least 80% of its net assets in the common stocks of large companies.
T. Rowe Price Lrg Cp Gr I fund has a track record of positive total returns for over 10 years. Specifically, TRLGX's returns over the three and five-year benchmarks are 25.9% and 15.7%, respectively. The annual expense ratio of 0.55% is lower than the category average of 0.94%. TRLGX 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.
JPMorgan U.S. GARP Equity I fund seeks long-term growth of capital. Under normal circumstances, JPGSX invests at least 80% of its assets in equity investments of large- and mid-capitalization U.S. companies.
JPMorgan U.S. GARP Equity I fund has had a track record of positive total returns for over 10 years. Specifically, JPGSX returns over the three and five-year benchmarks are 25.6% and 18.7%, respectively. JPGSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.59%.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
Fidelity Contrafund seeks capital appreciation. FCNTX invests primarily in the common stock of companies whose value management believes is not fully recognized by the public.
Fidelity Contrafund has a track record of positive total returns for over 10 years. Specifically, FCNTX's returns over the three and five-year benchmarks are 28.4% and 18.2%, respectively. FCNTX has an annual expense ratio of 0.59%, which is lower than its category average.
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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This article originally published on Zacks Investment Research (zacks.com).
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