3 Impressive Mutual Funds You Need To Know
Love him or hate him, the Trump presidency has triggered a massive bull market. Investors have poured money into U.S. stocks during the first year of the Trump White House.
The latest numbers reveal a 16% asset under management (AUM) growth rate for domestic equity funds in 2017. Domestic and international equity mutual funds led the charge with nearly 22% AUM growth to a level of just over $11 trillion during Trump’s first year in office.
Trillions in cash are left on the sidelines just waiting to be deployed into equity funds in 2018. I fully anticipate the accelerated growth to continue into the first half of 2018 as the bullish fever continues to attract both domestic and foreign capital.
In fact, the performance of some mutual funds reminds me of the 1980s, when mutual funds were on fire as the prime choice for equity investors. However, interest rates are dramatically lower today, making the atmosphere for long-term business growth truly ideal.
#-ad_banner-#I forecast that these winners of 2017 will continue their winning ways into the first half of 2018.
3 Mutual Funds To Keep An Eye On
1. T. Rowe Price Value (TRVLX)
Investors who follow the value stock mantra of Warren Buffett will be excited about this mutual fund.
The fund’s mandate is to seek undervalued stocks, and a minimum of 65% of AUM is allocated to common stocks. Holdings consist mostly of large-company names, but management does not shy from smaller ones.
The goal is to provide a moderately conservative portfolio of beaten-down stocks. By investing in stocks that already appear to be out of favor or undervalued, the fund has expectations of being less volatile than a fund focused on growth stocks.
Current top ten holdings include Aetna (NYSE: AET), Citigroup (NYSE: C), Phillip Morris (NYSE: PM), and Tyson (NYSE: TSN), among others. The mutual fund is higher by over 19% this year and has more than 90% of its assets dedicated to domestic equities.
Remember, with this fund you are buying the management’s skill at identifying undervalued stocks. Its five-year average annual return of 15% is a surefire sign of a talented manager. Well-picked value stocks will always be smart investments — no matter what happens in Washington.
This fund requires a minimum investment of $2,500.
2. Fidelity Select Technology (FSPTX)
With year-to-date returns of over 50% and an asset base pushing $6.5 billion, the Fidelity Select Technology Portfolio is a colossal winner this year. A five-year average return of nearly 22% proves it is no flash-in-the-pan investment.
The fund’s holdings focus on common stocks of companies that will provide or will benefit significantly from advances in the high-tech sector. The fund invests in both domestic and foreign companies. Investment decisions are based on a complete internal fundamental examination of factors, industry position, and market conditions.
Holdings include Apple (Nasdaq: AAPL), Facebook (Nasdaq: FB), and Tesla (Nasdaq: TSLA), to name a few in the top ten.
The fund’s expense ratio of 0.76%, significantly below the sector’s average of 1.42%, reflects long-time manager Charlie Chai’s ability to keep costs low.
It is difficult to argue against the overwhelming dominance of technology in our society. The FSPTX invests in the best of the best of the leading companies in the space. There is little doubt that the major components of the fund will continue to create profits for their shareholders in the years to come.
3. Schwab MarketTrack All Equity Portfolio (SWEGX)
A passively managed mutual fund boasting returns of greater than 17%, SWEGX proves that a well-diversified equity base can create profits.
The mixture of fundamental and index strategies combine the winning formulas of asset allocation and passive investing into a single fund. Goals of long-term capital appreciation are achieved by investing in other mutual funds, with financial funds accounting for nearly 17% of the current holdings. As for the common equity side of the portfolio, 31% is exposed to the broad S&P 500 index, and another 17% is invested in small-caps. Coming in third is international equities with nearly 14%.
This fund requires only $100 as an initial investment, making it perfect for new investors looking to get into the long-term mutual fund game.
Risks To Consider: Mutual funds are a great way to diversify across a sector or the entire global stock market. However, it is critical to note that diversification does not protect you from loss. Last year’s mutual fund winners are not guaranteed to be next year’s stars.
Action To Take: The above three mutual funds provide a diversified basket of top-performing equities. Consider investing in one or more of them with a portion of your investment portfolio.
Editor’s Note: Introducing: Our top 10 Stocks for 2018. See the shocking cost of ignoring them until after Christmas. Full details here.