Wall Street is on a rally, with the S&P 500 and the Nasdaq reaching record highs amid easing trade concerns and reduced geopolitical tensions. Investor confidence has also been lifted by growing expectations that the Federal Reserve may soon cut interest rates.
This wave of positive momentum has led to a rebound in consumer sentiment for the first time in 2025.
This renewed optimism is fueling investor confidence, making it a favorable time to consider investing in large-cap growth funds. Three such funds are Fidelity Contrafund FCNTX, Janus Henderson Research A JRAAX and MassMutual Disciplined Gr Svc DEIGX.
Consumer confidence surged in June, with the Michigan Consumer Sentiment Index jumping 16.3% to 60.7 from May’s 52.2, marking the largest monthly gain in more than three decades.
Several factors have been contributing to this rebound in sentiment. The United States is nearing a trade agreement with China after extensive negotiations, and more trade deals are expected ahead of the July 8 deadline for tariff talks.
Meanwhile, tensions in the Middle East have eased. Although the United States conducted airstrikes on Iran’s nuclear sites, Iran’s retaliation was less severe than feared. Alongside easing inflation and a softer labor market, this has raised hopes for Fed rate cuts.
Easing tensions are boosting markets. The S&P 500 notched another record close on Monday, rising 0.5% to finish at 6,204.95, following Friday’s high. The Nasdaq also climbed 0.5%, closing at 20,369.73. However, the tech-heavy Nasdaq gave up some of its gains on Wednesday but is on track to resume its northbound journey.
The S&P 500 has surged 20% since its April lows, and is up nearly 5% for the year. Markets are expected to gain further momentum if the Fed begins cutting rates, with traders anticipating at least two 25 basis point cuts in 2025. The first could come as early as July, based on signals from Fed officials.
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).
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 of positive total returns for over 10 years. Specifically, FCNTX’s returns over the three and five-year benchmarks are 21.8% and 17.4%, respectively. FCNTX has an annual expense ratio of 0.63%, 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.
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 21.4% and 16%, respectively. The fund’s annual expense ratio is 0.86%, 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.
MassMutual Disciplined Gr Svc fund seeks to outperform the total return performance of its benchmark index, the Russell 1000 Growth Index, while maintaining risk characteristics similar to those of the benchmark. DEIGX invests substantially all (but no less than 80%) of its net assets in common stocks of companies included in the fund’s benchmark index.
MassMutual Disciplined Gr Svc has a track of positive total returns for over 10 years. Specifically, DEIGX’s returns over the three and five-year benchmarks are 18.3% and 16%, respectively. DEIGX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.79%, 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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