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4 Large-Cap Blend Funds To Buy On Market Rally

After being beaten down heavily at the start of 2016, most of the major benchmarks have lately shown signs of stabilization with strong gains. Factors including a crude rally, improvement in the domestic economy and a low interest rate played the key roles in boosting investor sentiment. While the Dow entered the positive territory for the first time in 2016 last Thursday, the S&P 500 managed the same on Friday. Also, the markets posted weekly gains for the fifth consecutive week. Moreover, the fear-gauge CBOE Volatility Index (VIX) – a widely known measure of volatility – declined 23% since the start of 2016, indicating that the markets are stabilizing. Meanwhile, U.S. based mutual funds that focus on acquiring equity securities also rebounded strongly on the back of impressive performance at the equity markets. While most of the broader U.S. equity fund categories remain in the negative territory year to date, each category registered significant gains over the past one month. Banking on these positive developments, large-cap blend mutual funds, which offer the best of both value and growth investing and promise stable returns, may prove to be ideal investment propositions for now. Factors Leading to the Rebound A strong rally in oil prices was mainly behind the rebound in the major benchmarks. After touching a 13-year low on Feb. 11, the WTI crude gained nearly 50.5% on an increasing possibility of production freeze, continued decline in rig counts and a lower-than-expected rise in crude inventories. Qatari oil minister and president of OPEC, Mohammed Bin Saleh Al-Sada, recently said that the major oil producers will be meeting in Doha on April 17 to discuss production freeze. Meanwhile, rig count in the U.S. declined for the twelfth consecutive week to an all-time low level. Moreover, several economic data that released recently showed that the U.S. economy is on a path of recovery. While the economy witnessed strong and better-than-expected job growth last month, unemployment rate remained in line with the significantly low January rate of 4.9%. Also, the Labor Department reported that the core-Consumer Price Index (CPI), which excludes food and energy prices, gained 2.3% from the year-ago level, witnessing its biggest increase since May 2012. Meanwhile, the Fed recently highlighted that “economic activity has been expanding at a moderate pace despite the global economic and financial developments of recent months.” Separately, in its March meeting, the Federal Open Market Committee (FOMC) decided to keep the rate of interest flat between 0.25% and 0.50% and projected that the number of rate hikes this year will be two instead of four as forecast in its December meeting. The assurance that the rate will be kept unchanged for a longer period of time also had a positive impact on investor sentiment. And to top it all, the Fed Chairwoman Janet Yellen said: “The committee continues to feel that we are on a course where the economy is improving and inflation is moving back up.” 4 Large-Cap Blend Funds to Buy After losing nearly 6% in the first two months of 2016, the large-cap blend category made an impressive rebound on the back of gradual improvement in investor sentiment. This helped the category to register a strong gain of 7% over the past one-month period. The uniqueness of these funds to provide returns at a lower level of risk by investing in both value and growth stocks might have attracted investors. While large-cap funds offer more stability than mid caps or small caps, blend funds offer a great mix of growth and value investment. Given this favorable environment, we highlight four large-cap blend mutual funds that carry either a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy). We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify 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. These funds have encouraging one-month and year-to-date returns. The minimum initial investment is within $5000. Also, these funds have a low expense ratio and no sales load. DFA U.S. Large Company I (MUTF: DFUSX ) invests a minimum of 95% of its assets in securities of companies listed in the S&P 500 Index and tries to maintain a similar company weight. DFUSX may also invest in derivatives including futures contracts and options on futures contracts for adjustment of market exposure. Currently, DFUSX carries a Zacks Mutual Fund Rank #1. The fund has one-month and year-to-date returns of 7.2% and 0.9%, respectively. Annual expense ratio of 0.08% is lower than the category average of 1.03%. Vanguard Dividend Appreciation Index Investor (MUTF: VDAIX ) seeks to provide returns similar to the NASDAQ US Dividend Achievers Select Index. VDAIX invests all of its assets in common stocks of companies listed in the index in proportion, which is similar to their weighting in the index. Currently, VDAIX carries a Zacks Mutual Fund Rank #2. The fund has one-month and year-to-date returns of 5.7% and 3.7%, respectively. Annual expense ratio of 0.20% is lower than the category average of 1.03%. State Farm Growth (MUTF: STFGX ) invests heavily in securities including common stocks and others that are expected generate income. The fund invests in securities of companies with a minimum market capitalization of $1.5 billion. STFGX currently carries a Zacks Mutual Fund Rank #2. One-month and year-to-date returns of STFGX are 5.5% and 3.3%, respectively. Annual expense ratio of 0.12% is lower than the category average of 1.03%. Hartford Stock HLS IA (MUTF: HSTAX ) seeks capital appreciation over the long run. HSTAX invests the lion’s share of its assets in equity securities of large-cap companies having market capitalization within the range of the Russell 1000 Index. The fund may invest a maximum of 20% of its assets in foreign securities. Currently, HSTAX carries a Zacks Mutual Fund Rank #2. The fund has one-month and year-to-date returns of 5.4% and 2.6%, respectively. Annual expense ratio of 0.50% is lower than the category average of 1.03%. Original Post

Tap Water With These Stocks And ETFs

Water plays a major role in the evolution of the economy and, of course, human life. Though water accounts for three-fourths of the total earth surface, fresh water accounts for a meager 3% of the total. As a result, about 650 million people across the globe do not have access to fresh drinking water putting them at risk of infectious diseases and premature death, according to United Nations’ estimates . This is primarily thanks to limited supply, an ever-expanding population, poor sanitation, and growing demand for consumption. Notably, about 70% of the total demand comes from irrigation whereas demand from industrial applications and domestic households account for about 22% and 8%, respectively. Given the scarcity of drinking water, companies and governments are coming up with new ways to recycle, manage, and desalinate water resources. Utility operators have already started to invest in their aging infrastructure and President Barack Obama is seeking an 18% increase in federal spending next year for safe drinking water. As per the Environmental Protection Agency (EPA), U.S. water infrastructure needs more than $384 billion over the next two decades to ensure safe drinking water to Americans. Further, about $271 billion is needed to upgrade the treatment of plants’ storage tanks and water distribution systems over the next five years. Given this, water could be an important growth industry and an excellent investing area as utility operators start putting their money into this corner to meet growing global demand for fresh water. Further, our Zacks Industry Rank confirms the upside to this industry as water utility has a solid rank in the top 9% at the time of writing. And investors’ thirst could easily be quenched by tapping this growing opportunity with our chosen stocks and ETFs. Stocks in Focus We have used our Zacks stock screener to find out the best stocks in this space. The parameters include Zacks Rank #1 (Strong Buy) or #2 (Buy), positive current-year earnings estimate revisions over the past 30 days and positive current-year EPS growth. Connecticut Water Service, Inc. (NASDAQ: CTWS ) This Connecticut-based company is a regulated water operator providing water service to people throughout towns in Connecticut and Massachusetts. The company has seen estimates rising by a couple of cents over the past 30 days for this year with an expected earnings growth rate of 2.78%. The stock has a Zacks Rank #2 with a solid Momentum Style Score of A and is up 13.3% so far this year. Middlesex Water Co. (NASDAQ: MSEX ) This New Jersey-based company provides quality water and wastewater service to residents in parts of New Jersey and Delaware, and beyond. It has seen solid earnings estimate revision of four cents over the past 30 days for this year to $1.30, representing substantial growth of 6.56% year over year. The stock has a Zacks Rank #2 with a solid Momentum Style Score of A and Growth Style Score of B. MSEX has gained 15.3% in the year-to-date timeframe. The York Water Company (NASDAQ: YORW ) This Pennsylvania-based company impounds, purifies and distributes drinking water. The Zacks Consensus Estimate for 2016 has been revised up from $0.99 to $1.00 over the past 30 days reflecting year-over-year growth of 3.61%. The stock has a Zacks Rank #2 with a Momentum Style Score of B. It has returned 20.1% so far this year. ETFs in Focus While there are four water ETFs available in the market, we have highlighted three funds that are in the green in the year-to-date timeframe. PowerShares Water Resources Portfolio (NYSEARCA: PHO ) This fund provides exposure to the U.S. water utility stocks that create products to conserve and purify water for homes, businesses and industries. It tracks the Nasdaq OMX US Water index and holds 32 securities in the basket with nearly double-digit allocation to the top firm. Other firms hold less than 7.8% share. The fund has amassed $642.8 million in AUM and is considered liquid when compared to the other choices in the space. It charges investors 61 basis points a year in fees and has added 0.4% in the year-to-date timeframe. Guggenheim S&P Global Water Fund (NYSEARCA: CGW ) This ETF provides global exposure by tracking the S&P Global Water Index. It holds 53 stocks in its basket with the largest allocation of over 7% to the top two firms while other firms hold less than 5.6% share. The fund has managed assets of nearly $358.1 million and trades in volume of 52,000 shares per day on average. It charges 64 bps in fees and expenses from investors. In terms of country exposure, American stocks make up for nearly 39% of assets closely followed by United Kingdom with nearly 17.6% share. CGW is up 2.5% so far this year. First Trust ISE Water ETF (NYSEARCA: FIW ) This ETF follows the ISE Water Index, which is a benchmark of firms that derive a substantial portion of their revenues from the potable and wastewater industries. Holding 35 stocks, it is pretty well spread out across components with each holding not more than 5.10% of assets. The fund has amassed $105.1 million in its asset base while charging investors 59 bps in annual fees. Volume is light at nearly 13,000 shares a day on average. The fund has delivered impressive returns of over 9% in the year-to-date timeframe. Original Post

4 Top-Rated Global Mutual Funds To Watch For

In a scenario wherein the major central banks are choosing intensive economic stimulus measures and the U.S. benchmarks are rebounding strongly, investing in global mutual funds may provide an excellent opportunity to diversify one’s portfolio. While the U.S. economy has shown some signs of improvement and the key interest rates are expected to remain low for a longer period of time, the central banks of Eurozone, China and Japan opted for economic stimulus measures such as multiple rate cuts, negative interest rates and monetary easing to boost their respective economies. These countries are thus lucrative investment propositions for now. Thus, a portfolio having exposure to both domestic and foreign securities will help in reducing risk and enhancing returns. Also, if selected carefully, global mutual funds have the potential to offer secure and attractive investment opportunities. Below, we share with you four top-rated global mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Dreyfus Global Equity Income A (MUTF: DEQAX ) invests the lion’s share of its assets in equity securities of companies located in the developed nations including the U.S., Japan and Western Europe. DEQAX invests primarily in stocks of companies that are expected to pay dividend. The fund may also invest in securities issued in emerging countries. DEQAX allocates its assets in a minimum of three countries. Dreyfus Global Equity Income A returned 4.6% over the past four weeks. As of Jan. 2016, DEQAX held 55 issues with 5.52% of its assets invested in Philip Morris International Inc. (NYSE: PM ). Eaton Vance Tax-Managed Global Dividend Income A (MUTF: EADIX ) seeks total return after deduction of taxes. EADIX generally invests in dividend-paying securities of companies throughout the globe. The fund invests the majority of its assets in common and preferred stocks. Eaton Vance Tax-Managed Global Dividend Income A returned 5.8% over the past four weeks. EADIX has an expense ratio of 1.18% as compared to the category average of 1.28%. Fidelity Worldwide (MUTF: FWWFX ) invests primarily in common stocks of both domestic and foreign companies. FWWFX focuses on diversifying its investments across various countries and regions. Factors including financial strength and economic conditions are taken into consideration before investing in a company. Fidelity Worldwide returned 6% over the past four weeks. William Kennedy is one of the fund managers of FWWFX since 2006. Oakmark Global Select I (MUTF: OAKWX ) invests in common stocks of companies from a minimum of three countries. OAKWX is believed to maintain a portfolio of around 20 securities. Under normal circumstances, OAKWX invests not less than 40% of its assets in securities of foreign companies. Oakmark Global Select I is a non-diversified fund and returned 7.8% over the past four weeks. Original Post