For investors seeking a success story in the realm of mutual funds, the key lies in following the trail blazed by outperformers.
These funds offer a shield of diversification, acting as a safety net to minimize losses while ushering you into a realm of untold growth opportunities. The winning streak doesn’t stop here. Investing in outperforming mutual funds also gives you direct access to seasoned experts who have honed their craft navigating choppy market waters with the deftness of a seasoned sailor. After all, in the battle of wits that is the financial market, education and expertise often emerge as the steady victors.
Take, for instance, the Fidelity Fund (MUTF:FFIDX).
Year to date, the fund has already steamed ahead with a striking return of 17.21%, far outpacing the S&P 500 which rests at a YTD return of approximately 9.76%. Driving this ascent are sturdy holdings in tech giants like Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL), and Nvidia (NASDAQ:NVDA), all of which continue to scale new heights. What’s more, all this is achieved with a humble expense ratio of just 0.42%.
Accord to Fidelity.com, the FFIDX fund has delivered returns of 29.09% over the past year, 8.52% over the last three years, 15.22% over the last five years, and a healthy 13% over the last decade. This fund continues to offer a treasure trove of benefits at a modest cost.
But this standout is not an outlier. Here are three additional top-tier mutual funds deserving of your consideration today.
Fidelity Large Cap Stock Fund (FLCSX)
Year to date, the Fidelity Large Cap Stock Fund (MUTF:FLCSX) leads the race with a 13.91% surge. Over the last year, it posted a commendable 24.07% increase, while the last five years witnessed a solid 13.55% growth. Sporting an expense ratio of 0.84%, this mutual fund boasts stalwarts like Microsoft, Exxon Mobil (NYSE:XOM), General Electric (NYSE:GE), and the ever-promising Nvidia among its 176 holdings as of April 30.
Marching ahead, in the initial quarter of 2024, the fund notched an 11.8% gain, surpassing the S&P 500’s return of 10.56%. The glory of large-cap stocks, backed by tech behemoths like Nvidia basking in the artificial intelligence and machine learning glow, paints a tantalizing picture for the FLCSX fund.
With a middle-of-the-road expense ratio, this fund’s bet on some of the finest names in the tech industry feels like hitting the jackpot, with these stocks continuously on the rise.
ProFunds Semiconductor UltraSector Fund (SMPIX)
Another gem among the elite mutual funds is the Pro Funds Semiconductor Ultra Sector Fund Investor (MUTF:SMPIX). Year to date, the fund boasts a whopping 91.55% growth. Over the past year, it skyrocketed by 161.5%. The past five years were equally impressive, showing a 42.67% surge. Despite a slightly elevated expense ratio of 1.56%, the returns delivered have been nothing short of explosive.
Thanks to its rich blend of top-tier semiconductor stocks such as Nvidia, Broadcom (NASDAQ:AVGO), Advanced Micro Devices (NASDAQ:AMD), and Intel (NASDAQ:INTC) among the 42 holdings, this fund seeks daily investment results mirroring 1.5x the daily performance of the Dow Jones U.S. Semiconductor Index. With the rampant growth of AI and machine learning, diving into semiconductor stocks today seems like a ride on a winning horse.
Analysts at Gartner predict a meteoric rise in AI chips revenue, estimating it to hit $71.3 billion in 2024 from $53.7 billion in 2023, with further escalation to $92 billion in 2025.
Needham Aggressive Growth Fund (NEAGX)
For those eyeing another contender, the Needham Aggressive Growth Fund (MUTF:NEAGX) rises to the occasion.
Despite a slightly elevated expense ratio of 1.9%, it’s racing ahead of its benchmark with an astounding year-to-date return of 21.5%. Over the last year, it shot up by nearly 51%, while the past five years saw a commendable 22% uptick. Its top-tier holdings include Super Micro Computer (NASDAQ:SMCI), PDF Solutions (NASDAQ:PDFS), and Vicor Corp. (NASDAQ:VICR), among the 80 stocks it houses.
Mainly stocked with small-cap growth stocks, this fund shines bright as small-cap stocks begin their ascent over the financial horizon. Jefferies, in their forecast, have touted small-cap earnings to broaden, accelerate, and catch up with their larger counterparts as the year unfolds, a sentiment backed by legendary investor Stanley Druckenmiller, who recently secured a hefty bullish position on small-cap stocks.
In the intricate dance of financial markets, these three funds with their legendary managers offer a compelling narrative of growth, promise, and prudent investing that investors would do well to keep an eye on.