3 Large-Cap Growth Funds to Buy

Inflation is easing at a faster pace than expected. This definitely comes as a major relief to millions of consumers who were concerned that the U.S. economy might slip into a recession, especially due to the tariffs introduced by President Donald Trump.

However, these concerns have eased significantly over the past month, following a temporary pause on the tariffs and a breakthrough trade agreement between the United States and China.

This renewed optimism is fueling investor confidence, making it a favorable time to consider investing in large-cap growth funds. Three such funds are T. Rowe Price Lrg Cp Gr I TRLGX, T. Rowe Price Blue Chip Growth TRBCX and Fidelity Contrafund FCNTX.

The consumer price index (CPI) rose a meager 0.1% in May on a month-over-month basis, which was lower than the consensus estimate of a jump of 0.2%, the Commerce Department said last week. On a yearly basis, CPI climbed 2.4%, which was in line with the consensus estimate. Core CPI, which strips out the volatile food and energy prices, also rose 0.1% month over month and 2.8% year over year, both below expectations.

A major contributor to the decline was a 1% drop in energy prices. Prices for both new and used vehicles also decreased, by 0.3% and 0.5%, respectively. On the other hand, average hourly wages increased by 0.3% month over month and 1.4% year over year.

Trump has repeatedly urged the Federal Reserve to lower interest rates to stimulate growth. Although the Fed has remained cautious, it last cut rates by 25 basis points in December and paused further changes due to rising inflation. Now that inflation is easing, investors are increasingly confident that the Fed might resume rate cuts — possibly starting in September, with two 25-basis-point reductions expected this year.

Furthermore, the easing of trade tensions, highlighted by the recent U.S.-China deal, is contributing to the positive outlook. Ongoing talks with other nations also suggest that more trade agreements could be finalized soon, reinforcing the current momentum in the market.

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.