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5 Strong Buy Large-Cap Blend Funds To Boost Your Portfolio

Risk-averse investors interested in both growth and value investing may opt for large-cap blend mutual funds to achieve their objective. While large-cap funds usually provide a safer option than small-cap and mid-cap funds, blend funds provide significant exposure to both growth and value stocks. Blend funds – also called “hybrid funds” – aim for value appreciation by capital gains. It owes its origin to a graphical representation of a fund’s equity style box. Meanwhile, large-cap blend funds have exposure to large-cap stocks, providing long-term performance history and assuring more stability than what mid cap or small caps offer. Generally, companies with market capitalization of more than $10 billion are considered large cap firms. However, due to their significant international exposure, large-cap companies might be affected by a global downturn. Below, we share with you 5 top-rated, large-cap blend mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the fund to outperform its peers in the future. Selected American Shares Fund S (MUTF: SLASX ) seeks to provide capital appreciation and income. SLASX invests a large chunk of its assets in securities of domestic companies. SLASX primarily invests in common stocks of companies with market capitalization of more than $10 billion. The Selected American Shares S fund has a three-year annualized return of 13.7%. SLASX has an expense ratio of 0.94% as compared to the category average of 1.04%. Columbia Large Cap Enhanced Core Fund (MUTF: NMIMX ) invests the major portion of its assets in common stocks of companies that are included in the S&P 500 Index. NMIMX may also invest in convertible securities and other derivatives, which are expected to provide returns similar to the index. Numbers and weight of NMIMX may fluctuate in order to provide higher return, compared to that of the index. The Columbia Large Cap Enhanced Core Z fund has a three-year annualized return of 15.7%. As of August 2015, NMIMX held 116 issues with 4.56% of its assets invested in Apple Inc. (NASDAQ: AAPL ) Fidelity Fund (MUTF: FFIDX ) seeks capital growth over the long run. FFIDX primarily focuses on acquiring common stocks of companies located throughout the globe. FFIDX may also invest a notable share of its assets in bonds, which also include non-investment grade debt securities. FFIDX uses a “blend” strategy while investing in securities. Though FFIDX invests in stocks of companies irrespective of their market cap, it invests the major share of its assets in securities of large-cap companies. The Fidelity Fund has a three-year annualized return of 13.9%. John D. Avery is the fund manager of FFIDX since 2002. Goldman Sachs US Equity Insights Fund A (MUTF: GSSQX ) maintains a diversified portfolio by investing the lion’s share of its assets in equity securities that are issued in the US, including securities of non-US companies that are traded in the US. Currently, GSSQX invests more than 70% of its assets in securities of large-cap companies to achieve both long-term capital appreciation and dividend income. GSSQX may also invest in fixed income generating securities. The Goldman Sachs US Equity Insights A fund has a three-year annualized return of 15.5%. GSSQX has an expense ratio of 0.97% as compared to the category average of 1.04%. VALIC Company I Large Cap Core Fund (MUTF: VLCCX ) seeks capital appreciation over the long run with the prospect for current income. VLCCX invests the majority of its assets in common stocks of companies having large-size market capitalization. VLCCX invests in securities that are believed to be undervalued with a strong growth potential over the long term. VLCCX may invest a maximum of 20% of its assets in securities of foreign issuers. The VALIC Company I Large Cap Core fund has a three-year annualized return of 16.2%. Guy W. Pope is the fund manager of VLCCX since 2011. Original Post

Dovish Fed, Rising Oil And Falling USD Set Stage For GLD Rally

Summary Central banks in Japan and Europe continued to ease monetary policy, and Fed had just revealed its dovish side as two governors stood out to oppose the rate hike this year. GLD had formed a double bottom since August and reformed the uptrend on October 1 as oil got stronger and USD weakened. This sets the stage for stronger inflation, and GLD is about to get more valuable in its role as an inflation hedge. In this article, I am going to express my views on gold as seen on the SPDR Gold Trust ETF (NYSEARCA: GLD ). Basically, I am bullish on gold and see the current weakness as a mere retracement for the serious gold investor to build their gold stockpile at slightly lower prices. Gold serves as an inflation hedge throughout time. The current situation is making it easy for inflation to burst above the 2% inflation target suddenly and on a prolonged basis. This is because major central banks are all engaged in monetary easing, and there are no concrete signs that they are going to stop anytime soon. Japan & Europe To Continue on Easing Bias The Bank of Japan (BOJ) renewed its commitment to increase its monetary base by $80 trillion yen per year on its latest monetary policy statement on 7 October, 2015 . This is despite a moderately growing Japanese economy as inflation was still below its 2% target at 0.2% for August 2015. In Europe, inflation continued to be weak. Eurostat reported that inflation was negative 0.1% for the month of September 2015. This is one reason that the ECB continued to keep main refinancing interest rates at 0.05% and deposit facility interest rates at -0.20% . In addition to negative inflation, Europe is facing more risk to its growth as seen in the recent speech by ECB President Mario Draghi to the International Monetary and Finance Committee on 9 October, 2015 : “However, developments surrounding the slower growth in emerging market economies are posing renewed risks to the euro area outlook. Our monetary policy measures have supported, and continue to support, domestic demand, contributing to the euro area recovery and to a gradual improvement in the inflation outlook.” Hence it is clear that the ECB would not be changing its monetary easing stance soon and would continue to purchase $60 billion per month of public and private securities. Fed Steps Away For 2015 Rate Hike Most crucially, the Federal Reserve had just made it clear that it is doubtful over the lack of inflation in the US. The first hint came when the Fed failed to raise interest rates in its September 2015 meeting as widely anticipated. Next, the September meeting’s minutes were released, and it showed that the Fed officials were more worried about the lack of inflation despite the steady growth in the US. It was mainly blamed on low oil prices and the strong USD. After the minutes were released, Chair Janet Yellen and FOMC Vice Chair William Dudley stepped forward and made speeches to keep the hopes of a hike rate alive in this year, presumably in December 2015. However, recently, we have heard that two Fed governors had stepped out in opposition of a rate hike this year. It is rare to hear from Fed Governors Lael Brainard and Daniel Tarullo . Brainard made the case that he wanted to see a more robust recovery and Tarullo wanted to see a more robust inflation recovery. The Bureau of Labor Statistics reported that the most recent consumer price index declined 0.2% for September 2015. Fed governors have a permanent vote on the FOMC, and it should be noted that both immediate past Chairman Ben Bernanke and current Chair Janet Yellen had to go through the appointment of Fed governor before their supreme appointment. Hence the fact that both Fed governors bothered to appear on record to make their stance is a highly noteworthy event. With such opposition, it would be very difficult for Chair Yellen to hike rates this year even if she felt that it was necessary to do so to get ahead of the curve. Externally, this dovish position is supported by the IMF. Therefore, it should not come as a surprise that a Reuters survey showed that 55% of the polled economists expect a rate hike in December, and this is down from 60% in the previous month. Bullish GLD Formation Aided By Strengthening Oil & Weakening USD As we can see on the chart below, GLD had been on the rise since August and has since formed a double bottom. (click to enlarge) Source: StockCharts The Fed had overlooked the recent recovery of oil prices and has provided the ideal environment for inflation to grow. (click to enlarge) Source: StockCharts The other factor that would encourage inflation would the continued weakening of the USD, as seen in the chart below: (click to enlarge) Source: StockCharts Both effects require time to appear on the official reports which often come up with two months of delay. In the meantime, the market is actively pricing in higher inflation as gold prices have been on the uptrend since 1 October, 2015, in its latest wave up. Conclusion Gold prices are on the verge of a breakthrough as indulgent central banks around the world continue to either ease monetary policy or at the best stick to a neutral stance. The action of the Fed to signal clearly that it is unlikely to hike rate this year is a game changer. Don’t be too affected by the minor weakness on October 16. This is due to a strong consumer confidence report and this only provides a needed profit-taking opportunity. Gold should continue its uptrend after the retracement as fundamentals are in its favor.

What’s Behind The Recent Rally Of SLV?

Summary The silver market heated up in recent weeks. What’s behind the recent rally in the price of SLV? A weaker U.S. dollar and falling long-term yields are part of the story behind the latest recovery in the silver market. The silver market has heated in recent weeks, which has also pushed up the price of the iShares Silver Trust ETF (NYSEARCA: SLV ). What’s behind the recent rally of SLV? Let’s examine what is keeping up the price of SLV, and what does it mean up ahead for the silver market? Is it just because of the weaker U.S. dollar? It’s hard to consider the rally in the price of SLV without taking into account the recent depreciation of the U.S. dollar. The chart below presents the traded weighted U.S. dollar index (normalized to 100 for the end of March) and the price of SLV over the past several months: (click to enlarge) Source: FRED and Google Finance As you can see, the U.S. dollar lost some ground since the beginning of the month after several U.S. economic reports came below expectations including the NFP report, retail sales, and JOLTS. And since the core CPI came a bit higher than expected – the annual rate reached 1.9% – the market has become even more suspicious as to whether the FOMC will actually move forward and raise rates anytime soon, let alone this year. But the chart above also shows that while the depreciation of the U.S. dollar may have slightly contributed to the rally of the SLV, it still did fall by much to explain such a spike in SLV’s price. It’s worth noticing, however, that this week’s ECB monetary policy could have an impact on the foreign exchange markets including the euro/USD. And if the ECB were to convey a dovish sentiment that may include plans to expand or extend the current QE program, this news could actually pull back up the U.S. dollar – something that could curb down the recent rise in SLV and perhaps even bring it back down. If we also look at the recent changes in the long-term treasury yields relative to SLV, we could see that haven’t plummeted and only slowly came down in the past few weeks, which could have also helped boost up precious metals prices. (click to enlarge) Source of data: Bloomberg and U.S. Department of the Treasury Based on the CME Group 30-Day Fed Fund futures prices, the market has lowered the implied probabilities for the Fed to raise rates in December to only 30% and for March 2016 to 52% – only a month ago, the odds were close to 50% for a December hike. The drop in probabilities, mainly due to weaker-than-expected economic data – mostly in the labor market – has provided backwind to the silver market. And although from the fundamentals point of view, the market continues to slowly tighten, there haven’t been enough new developments to warrant such a rise in the price of SLV. Bottom Line The last time the price of SLV rose so fast in a single month was back in January of this year. Back then, long-term yields also dropped and the U.S. dollar fell against major currencies. And the Swiss National Bank decided to end the pegging of the Swiss franc to the euro. These events boosted volatility and helped pull up SLV. This time around, we also see falling U.S. dollar and lower LT yields, and volatility may have subsided in recent weeks, it could still erupt as there are growing concerns over the progress of China and even the U.S. This current climate could change and drag back down SLV especially if other central banks (ECB and BOJ) continue to move forward and devalue their respective currencies and the Fed pull its rate hike. But as long as these central banks don’t move forward – the Fed by raising rates, and ECB and BOJ in expanding their QE programs – the price of SLV is likely to continue to remain its current level. For more please see: Is SLV about to change course?