3 Solid Growth Funds to Buy as Economy Expands at Robust Pace
The U.S. economy is growing at a steady pace as inflation continues to cool. Easing price pressure is allowing people to spend, which is boosting the economy.
The Commerce Department reported last week that U.S. gross domestic product (GDP) grew 3.2% in the fourth quarter of 2023, as consumers spent lavishly. This follows 4.9% growth in the third quarter.
U.S. GDP has grown more than 2% for the sixth consecutive quarter, indicating that the economy is on solid ground and fears of an impending recession are fast ebbing. For the whole year, GDP grew 2.3% in 2023, higher than 1.9% recorded in the previous year.
Inflation has declined by over two-thirds from its June 2022 peak of 9.1% and is hovering around 3%. The consumer price index rose to 3.1% in January 2024. Easing price pressures is helping consumers spend lavishly, thus boosting the overall economy.
Consumer spending, which accounts for 70% of the overall economic activity, jumped 3% year over year in the fourth quarter of 2023.
Easing inflation has raised hopes that the Federal Reserve will soon start rate cuts. Although a rate cut in March is unlikely, as the Federal Reserve said that it will closely watch if inflation continues to decline sharply, investors are hopeful that the first interest rate cut could come in May.
Lower interest rates bode well for the broader economy as it lowers borrowing costs.
3 Best Choices
We have, thus, selected three large-cap mutual funds, namelyT. Rowe Price Lrg Cp Gr I TRLGX, Nuveen Winslow Large-Cap Growth ESG Fund NVLIX and Janus Henderson Research A JRAAX, carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain. Moreover, these funds have encouraging three and five-year returns. Additionally, 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 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 net assets in the common stocks of large companies.
T. Rowe Price Lrg Cp Gr I fund has a track of positive total returns for over 10 years. Specifically, TRLGX’s returns over the three and five-year benchmarks are 6.3% and 14.5%, respectively. The annual expense ratio of 0.56% is lower than the category average of 0.95%. TRGLX 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 10.3% and 17.2%, 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.
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 8.7% and 15.6%, 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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