Wall Street remains volatile due to various domestic macroeconomic data. The Consumer Price Index (CPI) increased for the third straight month in a row in December. Rising bond yields due to President Trump’s pro-growth economic policies also remain a concern. Better-than-expected retail sales and resilient labor market are positives.  

On an annual basis, CPI for the month of December was recorded at 2.9% closer to the Fed’s 2% target. However, on a month-on-month basis, CPI increased 0.4% in December, higher than the street’s expectation of 0.3%, due to a rise in the prices of gas, eggs and used cars. Bond yields, which rise when prices decline, have increased over the past few months as Trump’s policies to boost economic growth could further push up inflation. Yields were last at 4.65%, down from more than a one-year high of 4.8%.

Regarding his plans for the economy, President Trump at Davos, Switzerland said that he is working to reverse inflation, lower taxes and boost fossil fuels production in the United States. Retail sales increased 3.9% year over year in December, indicating positive consumer demand despite the rise in inflation. The labor market is also on solid ground as job creation totaled 250,000 in December, whereas the unemployment rate dropped to 4.1% over the same period from 4.2% in November. Challenges remain for the Fed to keep inflation under check.

Amid such market conditions, mutual fund investing can help those who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds. Mutual funds like BlackRock Global Equity Market Neutral Fund BDMAX, BlackRock Large Cap Focus Value Fund MDBAX and BlackRock Tactical Opportunities Service PCBSX should be good choices since they provide low-cost and uncomplicated equity funds that can help investors meet their goals.

These funds have wide exposure in sectors such as industrial cyclical, energy, non-durable, technology, finance and retail, which are expected to perform well in the long term.

Why Invest in BlackRock Mutual Funds?

BlackRock mutual funds can be the preferred choice for investors who wish to diversify their portfolio but lack the necessary expertise in managing their own funds. Blackrock, founded in New York in 1988, is one of the leading investment, advisory and risk-management solutions companies. The fund house has a reputation as a trusted partner and long-term financial success.

BlackRock was founded as a standalone investment management company that focuses on providing asset and risk-management services to its clients. It is the world's largest asset management company and in the first quarter of 2024, its assets under management hit a record high of $10.5 trillion. Its assets under management span various asset classes like equity, fixed income, cash management, alternative investment and real estate.

Blackrock has more than 19,000 employees in more than 38 countries. The company manages assets for clients in North and South America, Europe, Asia, Australia, the Middle East, and Africa. Its clients include corporate, public and pension plans for various governments, insurance companies, third-party mutual funds, endowments, foundations, charities, corporations, official institutions, sovereign wealth funds, banks, financial professionals, and individuals worldwide.

We have thus selected three Blackrock mutual funds that have not only preserved investors’ wealth but also generated excellent returns in the past. These funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio.

Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

BlackRock Global Equity Market Neutral Fund invests most of its assets in equity and derivative securities of companies that are economically tied to developed markets, irrespective of market capitalization. BDMAX advisorsadopt a market-neutral strategy by taking both long and short positions in a variety of developed market equity instruments that are denominated in either U.S. dollars or foreign currencies.

Raffaele Savi has been the lead manager of BDMAX since Dec. 20, 2012. Most of the fund’s exposure is in companies like Netflix (0.8%), Citigroup (0.7%) and Procter & Gamble (0.5%) as of Oct. 31, 2024.

BDMAX’s three-year and five-year annualized returns are almost 12% and 7.7%, respectively. BDMAX has an annual expense ratio of 1.59%.

To see how this fund performed compared to its category and other 1, 2, and 3 Ranked Mutual Funds, please click here.

BlackRock Large Cap Focus Value Fund seeks capital appreciation along with current income by investing most of its assets along with borrowings, if any, in large-cap equity securities and derivatives that have similar economic characteristics to such securities. MDBAX advisors primarily choose to invest in equity securities of undervalued companies.

Tony DeSpirito has been the lead manager of MDBAX since Nov. 14, 2019. Most of the fund’s exposure were in companies like Citi Group (3.4%), Wells Fargo (3.4%) and Comcast (3.2%) as of Sept. 30, 2024.

MDBAX’s three-year and five-year annualized returns are almost 6.7% and 8.9%, respectively. MDBAXhas an annual expense ratio of 0.78%.

BlackRock Tactical Opportunities Service invests most of its assets using a macro asset allocation strategy, in varying percentages in a portfolio of global stocks, bonds, money market instruments, foreign currencies and cash. PCBSX advisors also invest in common stocks, preferred stocks, convertible and non-convertible securities and depositary receipts.

Philip J. Green has been the lead manager of PCBSX since Dec. 31, 2006. Most of the fund’s exposure was in companies like Microsoft (3.4%), Apple (3.3%) and NVIDIA (2.9%) as of July 31, 2024.

PCBSX’s three-year and five-year annualized returns are almost 6.6% and 5.3%, respectively. PCBSX has an annual expense ratio of 1.05%.

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