4 Best No-Load Mutual Funds to Buy Today

Zacks Equity Research

U.S. equities have been highly volatile lately, owing to a number of factors such as indecision over the newly proposed Brexit deal and the ongoing U.S.-China trade dispute. After all, as long as United Kingdom and European Union (EU) do not pass the Brexit deal, investors will remain concerned over strained trade relations and global growth slowdown.

In such a scenario, investing in no-load mutual funds would be prudent.

Uncertainty Looms Large Over Proposed Brexit Deal

The UK and EU reached a newly proposed Brexit deal last week, which was up for vote in the UK parliament on Oct 19. But lawmakers delayed the vital Brexit vote and forced prime minister Boris Johnson to ask the EU to extend the current Oct 31 deadline to Jan 31, 2020.

With merely 10 days remaining for the UK to split from the EU, the uncertainty over the new deal is overwhelming. UK may leave with the proposed deal, leave without a deal or hold another referendum.

In his letter to the EU, Johnson wrote that “a further extension would damage the interests of the UK and our EU partners” and would have a staggering effect on the relationship. The European Union hasn’t responded yet.

Johnson will attempt to put his Brexit deal to a vote in parliament on Oct 21. It is unclear whether John Bercow, the House of Commons speaker, would allow a vote on the newly proposed deal on Monday or not.

Why Invest in No-Load Funds?

Considering the fact that a resolution to the trade dispute between the United States and China remains far out of sight, investors are expected to remain on tenterhooks. Further, the now-familiar Brexit-related woes have also dampened market sentiments. Under such circumstances, one would do well to invest in no-load mutual funds.

First, no-load funds do not charge an exorbitant fee. This means that these funds do not have a front-end or back-end charge.

Second, the gross returns of a no-load fund are deducted to shell out the expenses incurred in order to manage the mutual fund’s portfolio. This indicates that no-load funds that have lower expense ratios offer higher returns.

Our Choices

We have, therefore, selected four mutual funds that invest in no-load funds. All these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) and have encouraging year-to-date returns. Additionally, the minimum initial investment is within $5,000 and do not carry any load.

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.

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).

Goldman Sachs Global Income Fund Investor Shares GBIRX invests the majority of its assets in a portfolio of fixed income securities of U.S. and non-U.S. stocks. The non-diversified fund aims for high total return that focuses on current income.

This Zacks sector – Intl Bond-Developed product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

GBIRX has an annual expense ratio of 0.75%, which is below the category average of 0.82%. It has returned 9.5% on a year-to-date basis. GBIRX has no minimum initial investment.

Fidelity Real Estate Income Fund FRIFX aims for more-than-average income. The fund invests the majority of its assets in securities of companies that are engaged in operations in the real estate industry. The fund usually invests in common and preferred stocks of REITs and debt securities of real estate companies. The fund also invests in commercial and other mortgage-backed securities, emphasizing low-quality debt securities.

This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FRIFX has an annual expense ratio of 0.75%, which is below the category average of 1.22%. It has returned 16.2% on a year-to-date basis. FRIFX has no minimum initial investment.

Fidelity Fund FFIDX seeks long-term capital appreciation. The fund usually invests in growth or value stocks or both. FFIDX primarily invests in common stocks.

This Zacks sector – Large Cap Blend product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FFIDX has an annual expense ratio of 0.50%, which is below the category average of 1.08%. It has returned 21.7% on a year-to-date basis. FFIDX has no minimum initial investment.

Fidelity Balanced Fund FBALX aims for growth in capital and income that is consistentwith reasonable risk. The fund invests the majority of its assets in stocks and other equity securities. Further, the fund also invests the rest of its assets in bonds and other debt securities.

This Zacks sector – Allocation-Balanced product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FBALX has an annual expense ratio of 0.53%, which is below the category average of 0.82%. It has returned 16% on a year-to-date basis. FBALX has no minimum initial investment.

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