Chipmaking giant NVIDIA Corporation (NVDA – Free Report) develops and manufactures graphics processing units (GPUs) that were initially used for PC graphics and video games. The products are in high demand now because they play a key role in the field of artificial intelligence (“AI”) applications. Owing to the massive AI optimism that has been carrying the tech sector on its shoulders over the past year or so, NVIDIA has been unstoppable.
NVDA’s stock price has surged 155.2% year to date and a whopping 764.9% since the onset of 2023. On Feb 22, its market cap increased by $277 billion, the largest one-day gain in Wall Street’s history. In June, Nvidia became only the third company ever to cross the $3 trillion market cap mark and briefly surpassed Microsoft Corporation (MSFT – Free Report) as the world’s largest company.
In the first quarter of 2024, NVDA came out with quarterly earnings of $6.12 per share, beating the Zacks Consensus Estimate of $5.49 per share. It posted revenues of $26.04 billion for the period, surpassing the Zacks Consensus Estimate by 7.02%. In the last four reported quarters, the AI chip behemoth surpassed the EPS and revenue estimates on each occasion.
And that is not the end of this success story. On Jun 2, NVIDIA’s CEO Jensen Huang presented the company’s latest generation of AI chips to the world. “With our innovations in AI and accelerated computing, we’re pushing the boundaries of what’s possible and driving the next wave of technological advancement,” Huang said. This entails that the company is going to sustain its growth, and will not bog down under the pressure of its own meteoric rise for the time being.
Hence, mutual funds exposed to NVDA provide much-required stability and growth potential. Astute investors should consider such funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected four such mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000, and carry a low expense ratio.
Permanent Portfolio (PRPFX – Free Report) allocates its assets in gold, silver, swiss franc assets, real estate, natural resources, aggressive growth stocks and dollar assets. Currently, 2.5% of its portfolio is invested in NVDA.
Michael Joseph Cuggino has been one of the lead managers of PRPFX since April 2003. PRPFX’s 3-year and 5-year annualized returns are 5.6% and 10.1%, respectively. Its net expense ratio is 0.82% compared with the category average of 0.91%. PRPFX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Capital Appreciation (FDCAX – Free Report) invests the majority of its net assets in common stocks that are considered “growth” or “value.” FDCAX advisors use fundamental analysis of each issuer’s financial condition and industry position, as well as market and economic conditions, to arrive at their investment decisions. Currently, 6% of its portfolio is invested in NVDA.
Jason Weiner has been one of the lead managers of FDCAX since September 2018. FDCAX’s 3-year and 5-year annualized returns are 9.4% and 16.8%, respectively. Its net expense ratio is 0.64% compared with the category average of 0.94%. FDCAX has a Zacks Mutual Fund Rank #1.
Putnam Large Cap Growth (POGAX – Free Report) invests the majority of its net assets in companies similar in size to those in the Russell 1000 Growth Index. POGAX advisors mainly invest in common stocks of large U.S. companies, with a focus on growth stocks. Currently, 8.9% of its portfolio is invested in NVDA.
Richard E. Bodzy has been one of the lead managers of POGAX since August 2017. POGAX’s 3-year and 5-year annualized returns are 10.3% and 17.9%, respectively. Its net expense ratio is 0.46% compared with the category average of 0.95%. POGAX has a Zacks Mutual Fund Rank #2.
American Funds New Economy (ANEFX – Free Report) invests the majority of its net assets in companies that its advisors believe have a potential for growth. ANEFX advisors invest primarily in common stocks of companies that can benefit from innovation and new technology. Currently, 2.3% of its portfolio is invested in NVDA.
Reed Lowenstein has been one of the lead managers of ANEFX since September 2018. ANEFX’s 3-year and 5-year annualized returns are 2.9% and 11.3%, respectively. Its net expense ratio is 0.77% compared with the category average of 0.95%. ANEFX has a Zacks Mutual Fund Rank #2.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>