Mutual funds offer several benefits, including higher liquidity than individual stocks. Further, they allow investors to diversify their portfolios across multiple sectors. Investors with long-term horizons could consider – VTSMX and FAFGX – two equity mutual funds with over 10% upside potential in the next twelve months, as projected by analysts.
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Let’s take a closer look at the two funds.
Vanguard Index Trust Total Stock Market Index Fund (VTSMX)
The VTSMX fund tracks the performance of the overall stock market by investing in stocks across various industries and sectors. This fund is managed by Vanguard, an investment management company. Also, it has a low expense ratio of 0.14%, making it a cost-effective option. Interestingly, VTSMX has generated a return of 23.6% over the past year.
Overall, VTSMX has a Moderate Buy consensus rating. This is based on the weighted average consensus rating of each stock held in the portfolio. Of the total stocks held, 2,336 have Buys, 1,260 have a Hold rating, and 89 have a Sell rating. The analysts’ average price target on the VTSMX fund of $147.59 implies a 15% upside potential from the current levels.
The Growth Fund of America (FAFGX)
The FAFGX fund focuses on long-term appreciation by investing in stocks that are expected to offer better opportunities for capital growth. The fund invests primarily in common stocks of large and mid-capitalization companies. Its low expense ratio of 0.4% is encouraging. The FAFGX fund has returned about 21% over the past year.
On TipRanks, FAFGX has a Moderate Buy consensus rating. This is based on 270 stocks with a Buy rating, 58 stocks with a Hold rating, and two with a Sell rating. The analysts’ average price target on the FAFGX fund of $81.57 implies a 12.98% upside potential from the current levels.
Concluding Thoughts
Several benefits of investing in mutual funds, coupled with the projected upside potential of VTSMX and FAFGX, make these funds worth considering by investors. However, a prudent approach necessitates in-depth research before investing.
