3 Mighty Mutual Funds to Buy for Q2

  • If you are looking for mutual funds to buy, these picks feature a range of value and growth funds that deserve further due diligence.
  • Fidelity Select Semiconductors Portfolio (FSELX): Offers exposure to high-growth semiconductor stocks that have recently come under pressure.
  • Goldman Sachs Large Cap Core Fund Institutional Class (GSPIX): Allocates 90% of its total assets in investments with long-term capital appreciation potential.
  • Vanguard High Dividend Yield Index Fund Admiral (VHYAX): Focuses on dividend stocks that could provide calm in current volatility.
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Mutual funds to buy get significant attention on Wall Street. After all, these have become one of the most popular ways to invest in stocks as well as many asset classes.

For instance, total net assets under management (AUM) of U.S. mutual funds have roughly tripled from 2004 to 2020. Statista estimates that the AUM of mutual funds will reach $26.8 trillion in 2025.

InvestorPlace users likely already know mutual funds enable investors to purchase numerous assets in a single basket. The result is a diversified portfolio at a reasonable annual cost.

Financial planners highlight that mutual funds are especially desirable for long-term investors. Therefore, those who are looking to accumulate wealth for later years should research these funds further.

With that information, here are three well-established mutual funds to buy that currently trade at attractive valuations.

FSELX Fidelity Select Semiconductors Portfolio $17.16
GSPIX Goldman Sachs Large Cap Core Fund Institutional Class $32.26
VHYAX Vanguard High Dividend Yield Index Fund Admiral $32.52

Fidelity Select Semiconductors Portfolio (FSELX)

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Recent metrics suggest the global semiconductor market should reach nearly $900 billion by 2029. In other words, between 2022 and 2029, it would show a compound annual growth rate (CAGR) of well over 9%.

Our first mutual fund is the Fidelity Select Semiconductors Portfolio (NASDAQ:FSELX), which invests in chip stocks. The fund started trading in July 1985, and net assets stand at $7 billion. Its annual expense ratio stands at 0.68%.

FSELX currently has 48 holdings, and the top 10 stocks comprise about three-quarters of the portfolio. Thus, it is a highly concentrated exchange-traded fund (ETF). Nvidia (NASDAQ:NVDA), NXP Semiconductors (NASDAQ:NXPI) and Advanced Micro Devices (NASDAQ:AMD) are among those top stocks.

The fund is down about 30% year-to-date (YTD). By comparison, the widely-followed PHLX Semiconductor Sector Index has lost about 25% since January. I believe this recent decline offers an opportune entry point into a mutual fund like FSELX.

Goldman Sachs Large Cap Core Fund Institutional Class (GSPIX)

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Next comes the Goldman Sachs Large Cap Core Fund (NASDAQ:GSPIX), which focuses on businesses with sustainable growth prospects. Therefore, if you are looking for capital gains, the fund deserves your attention.

GSPIX, which started trading in August 1997, has 174 holdings. Its annual expense ratio is 0.8%. In terms of sectoral allocations, we see information technology (IT) leading at 27.7%, followed by health care at 13.4%, financials at 10.8% and consumer discretionary at 9.8%.

The top 10 stocks in the portfolio account for 27% of its net assets of $1.3 billion. Among them are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).

GSPIX is currently hovering near 52-week lows and has lost about 15% YTD. The fund is trading at 19.5 times trailing earnings and 4.2 times book value.

GSPIX stock includes some of the most important growth names of the past decade. We can expect these large-capitalization picks to create shareholder value in future quarters as well.

Vanguard High Dividend Yield Index Fund Admiral (VHYAX)

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The final stock in our list of mutual funds to buy is the Vanguard High Dividend Yield Index Fund Admiral (NASDAQ:VHYAX). It invests in U.S. businesses that have consistently paid larger-than-average dividends. The fund started trading in February 2019, and the expense ratio is 0.08%.

VHYAX, which tracks the FTSE High Dividend Yield Index, has 445 holdings. With regards to subsectors, more than a fifth of the portfolio is in financials. Then comes health care at 13.9%, consumer staples at 12.4% and industrials at 10.2%. 

The top 10 stocks in the portfolio account for 22% of its $57.4 billion in net assets. Johnson & Johnson (NYSE:JNJ), JP Morgan Chase (NYSE:JPM) and Procter & Gamble (NYSE:PG) are among them.

The fund is down about 4% so far in 2022, and the current price supports a dividend yield of 2.75%. Finally, InvestorPlace users may be interested to know VHYAX is available as an ETF as well. The Vanguard High Dividend Yield Index Fund ETF Shares (NYSEARCA:VYM) could appeal to many investors.

On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.


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