Top Rated Mutual Funds for 2014
AlphaProfit to Provide New Recommendations on Best Large Cap Funds and Best Small Cap Funds for 2014
The AlphaProfit No Load Fund Growth model portfolio will be reconstituted on February 20, 2014 with top rated mutual funds in the large cap, small cap, foreign, and specialty categories.
Stocks got off to a rocky start in 2014 after ending 2013 on a strong note.
They have however reversed most of January's losses now. The S&P 500 is just 12 points from a new high.
Fidelity Spartan 500 Index Fund (FUSEX) that tracks the S&P 500 index ($SPX) is down 27 basis points.
Large cap funds are leading the way in 2014 after small cap funds topped the charts in 2013.
The Fidelity Spartan Small Cap Index Fund (FSSPX) and Schwab Small Cap Index Fund (SWSSX) that track the Russell 2000 Index ($IWM) are each down nearly 1.2%.
Abroad, developed markets have generally kept pace with the U. S. market while emerging markets have lagged.
Fidelity Spartan International Index (FSIIX) that tracks the MSCI EAFE index is down 64 basis points this year while the Fidelity Spartan Emerging Markets Index Fund (FPEMX) that tracks the FTSE Emerging Index is down 4.6%.
Discussing the recent performance of stock markets, Dr. Sam Subramanian, Managing Principal of AlphaProfit Investments, LLC and Editor of AlphaProfit's Premium Service Investment Newsletter said, 'Emerging market stocks came under pressure from a currency selloff in early 2014, prompted by the Federal Reserve's decision to pare stimulus. Strong corporate earnings reports and assurance from the Federal Reserve to help the economy achieve full employment have lifted investor sentiment and enabled U. S. stocks to recoup losses.'
Asset purchases by the Federal Reserve & the Bank of Japan supported the global economy in 2013 and helped most developed markets to perform well.
Although volatility of U. S. stocks declined in 2013, investors had plenty of issues to worry.
Concerns of the Federal Reserve tapering bond purchases persisted through the year. Then, there were worries on the fiscal cliff and sequestration at the start of 2013 and the federal government shutdown at the end of the year.
Navigating through the volatility, the AlphaProfit No-Load, No-Transaction-Fee Growth Model Portfolio is up 19.4% since February 20, 2013.
AlphaProfit subscribers benefited from contributions made by top rated domestic mutual funds like Akre Focus (AKREX) and Glenmede Large Cap 100 (GTLOX) that are up over 33% and 28%, respectively in the past year.
Top rated foreign mutual funds selections Fidelity Nordic (FNORX) and Matthews Japan (MJFOX) each gained over 25% to contribute to subscriber's gains.
Will Rising Valuation cause Top Rated Mutual Funds to Tumble?
Stocks have more than tripled from the depths of their financial crisis lows set in March 2009. The S&P 500 is up 202% since then while the small cap proxy Russell 2000 is up 258%.
While corporate earnings have nearly doubled, over 50% of the gain in stock prices is attributable to an expansion in valuation metrics.
The S&P 500's forward P/E has risen from about 9.8 to 15.1. The forward P/E currently exceeds both the 5- and 10-year averages of 13.1 and 13.9, respectively.
Dr. Subramanian says, 'Investors have been willing to pay more for stocks as macroeconomic fears have eased in recent years. Low bond yields have also compelled investors to look to dividend yielding stocks for income, pushing stock valuation metrics higher. Additionally, earnings growth expectations are rising and supporting higher valuation multiples as confidence in the economy improves.'
Analysts currently expect the rate of growth in S&P 500 company earnings to accelerate through 2014. Forecasts call for EPS growth of 1.2%, 7.9%, 12.1%, and 11.7% in each quarter resulting in full year-earnings growth of 9.2%.
'While rising valuation is by itself not a cause of concern, stocks are likely to go through a corrective phase if investor confidence in the ability of companies to raise their growth rates deteriorates,' warns Dr. Subramanian.
Dr. Subramanian believes U. S. stocks can add to their gains in 2014 if the economy stays on track allowing the Federal Reserve to prune bond purchases and corporate earnings grow.
Top Rated Mutual Funds for 2014 - Large Cap, Small Cap, and Foreign
AlphaProfit's no-load (NL), no-transaction fee (NTF) growth model portfolio will be repositioned with top rated mutual funds on February 20. Learn more about AlphaProfit's best fund recommendations and fund model portfolios.
During the past five years, the NL-NTF growth model portfolio has gained at a 19.9% annual rate, well in excess of the 15.9% rate for its global benchmark.
Several top rated mutual funds contributed to the NL-NTF growth model portfolio's outperformance.
AlphaProfit subscribers benefited from the selection of top rated domestic mutual funds like Fidelity Small Cap Discovery (FSCRX) and ASTON/Fairpointe Mid Cap (CHTTX) that have gained over 280% and 250%, respectively. Among top rated mutual funds in the foreign category, subscribers benefited from Wasatch International Growth (WAIGX) and Westcore International Small Cap (WTIFX) that have risen over 260% and 225%, respectively.
Looking ahead to the repositioning Dr. Subramanian said, 'Our primary task is to help subscribers protect their recent gains and invest in top rated mutual funds for 2014. Additionally, we look forward to helping subscribers take advantage of a good buying opportunity likely to arise in 2014.'
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