In this article we discuss the 10 most popular mutual funds on Reddit.
Mutual fund managers have been fighting challenges like tighter margins, industry-wide consolidation, and changing workplace conditions in the past few months. With slower growth and shrinking fees also factored into the equation, the overall trends for the mutual fund industry do not paint a rosy picture. However, per a report by professional services firm PwC, mutual fund managers are now building for the future by turning to strategic positioning, tech transformation, and rethinking of the workforce.
For example, many mutual funds have adapted to a market dominated by mega managers that are using an adaptable tech infrastructure and a remote workforce to suit their needs. PwC estimates that assets under management for mutual funds will grow by only around 3.1% by 2025, an indicator that the market is shifting towards passive funds that are estimated to account for 55% of the total assets under management by the fund industry over the period. The expense ratios for the funds will also decrease in the coming years.
Market Slowdown Presents Opportunity for Growth
As the central bank tightens monetary policy to fight record inflation, US-based mutual funds are witnessing new outflows as well. According to investment bank Goldman Sachs, equity mutual funds and exchange traded funds in the US witnessed $37 billion worth of outflows over the past four weeks, the biggest four-month outflow total since 2018. Deutsche Bank analysts have warned of a 20% drop in the benchmark S&P 500 in 2023 as fears of a recession take the US stock market by storm.
In this overall market environment, many funds are trading at bargain prices despite offering the same basic fundamentals. Some of the top stocks that these funds have invested in include solid businesses like Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB), and Microsoft Corporation (NASDAQ:MSFT). As the market panics, investment advisors at Credit Suisse and Truist believe that a large degree of Fed tightening is already priced into the market, resulting in a correction in valuations and a reset of investor expectations.
Our Methodology
The mutual funds that are popular on internet platform Reddit were selected for the list. The top holdings of each fund are mentioned alongside other details for further clarity. A database of around 900 elite hedge funds tracked by Insider Monkey in Q4 2021 was used to quantify the popularity of each stock in the hedge fund universe.
Source:unsplash
Most Popular Mutual Funds on Reddit
10. Vanguard Total Stock Market Index Fund Admiral Shares (NASDAQ:VTSAX)
Vanguard Total Stock Market Index Fund Admiral Shares (NASDAQ:VTSAX) is an index fund that tracks the performance of the CRSP US Total Market Index. The index measures the return of the overall stock market. The index comprises micro, small, mid, and large cap companies that trade on exchanges in the United States.
A premier holding of the Vanguard Total Stock Market Index Fund Admiral Shares (NASDAQ:VTSAX) is Apple Inc. (NASDAQ:AAPL), a consumer electronics firm. At the end of the fourth quarter of 2021, 134 hedge funds in the database of Insider Monkey held stakes worth $186 billion in Apple Inc. (NASDAQ:AAPL), up from 120 in the previous quarter worth $146 billion.
Just like Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB), and Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL) is one of the growth stocks on the radar of elite investors.
In its Q4 2021 investor letter, Berkshire Hathaway highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple Inc. (NASDAQ:AAPL) – our runner-up Giant as measured by its yearend market value – is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple’s repurchases did the job. It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple Inc. (NASDAQ:AAPL) shares, an act we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple Inc. (NASDAQ:AAPL) products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well.”
9. Vanguard Total International Stock Index Fund Admiral Shares (NASDAQ:VTIAX)
Vanguard Total International Stock Index Fund Admiral Shares (NASDAQ:VTIAX) is a fund that tracks the performance of the FTSE Global All Cap ex US Index. The benchmark index tracks the performance of stocks issued by companies located in developed and emerging markets, excluding the United States.
One of the top holdings of Vanguard Total International Stock Index Fund Admiral Shares (NASDAQ:VTIAX) is Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), a firm that makes and sells integrated circuits and semiconductors. At the end of the fourth quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth $10.9 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 67 in the preceding quarter worth $9.5 billion.
In its Q1 2022 investor letter, Wedgewood Partners, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of them. Here is what the fund said:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) pulled back on geopolitical concerns and periodic market fears about the end of the “cycle” in semiconductors. First, we think the Company might be one of the most – if not the most – important Companies in the world. Taiwan Semiconductor has a near-monopoly on semiconductor processing at advanced nodes, which makes it irreplaceable to customers such as Apple, AMD, NVIDIA, Mediatek, Amazon, and even Intel. Second, much less important manufacturers have more direct geopolitical risk than Taiwan Semiconductor, yet they trade at substantial premiums – both multiple and market cap. For example, Tesla is a heavy manufacturer of only about 1 million automobiles with significant production capacity located in the heart of China, yet it trades at double the market cap of Taiwan Semiconductor. Third, while it is hard to know when the current semiconductor “cycle” will slow or end, we see very few signs of it, as Taiwan Semiconductor continues to generate bookings well in excess of its current capacity – unlike any previous cycle. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) traded to levels that are much too pessimistic given its competitive positioning and opportunity for growth driven by a more robust semiconductor cycle, driven by high-performance computing. As such, we added to our position during the quarter.”
8. Vanguard Total Bond Market Index Fund Admiral Shares (NASDAQ:VBTLX)
Vanguard Total Bond Market Index Fund Admiral Shares (NASDAQ:VBTLX) is a fund that tracks the performance of the Bloomberg Barclays US Aggregate Float Adjusted Index. The fund tracks the performance of a large group of securities in the United States, including government, corporate, and international dollar-denominated bonds.
Vanguard Total Bond Market Index Fund Admiral Shares (NASDAQ:VBTLX) has more than $316 billion in net assets under management with a holdings turnover of 79%. The fund has a yield of 1.90%.
7. USA Mutuals Vice Fund Investor Class Shares (NASDAQ:VICEX)
USA Mutuals Vice Fund Investor Class Shares (NASDAQ:VICEX) is a fund that invests at least 80% of net assets in companies that operate in legacy industries such as alcoholic beverages, defense or aerospace, gaming, and tobacco. The fund seeks long-term growth of capital through investments in these sectors.
One of the top holdings of USA Mutuals Vice Fund Investor Class Shares (NASDAQ:VICEX) is DraftKings Inc. (NASDAQ:DKNG), a digital sports entertainment and gaming firm. At the end of the fourth quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $1.30 billion in DraftKings Inc. (NASDAQ:DKNG), up from 28 the preceding quarter worth $1.32 billion.
In its Q4 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DraftKings Inc. (NASDAQ:DKNG) was one of them. Here is what the fund said:
“Shares of DraftKings Inc. (NASDAQ:DKNG) fell in the quarter, as stocks of online gaming companies were under pressure. Sports betting and i-gaming are rolling out with great fanfare and success across the country; however, investors seem concerned about competition and margins. Most participants are spending heavily on marketing and promotions, which is cutting into margins. We see this as worthy investment in customer acquisition at a moment in time when revenues are just building. We continue to believe that online sports betting and gaming will be enormous industries, that DraftKings Inc. (NASDAQ:DKNG) will be a leading player. We think the business will have high margins as it matures. We believe we are underwriting the business conservatively and see much upside in the long term.”
6. Gabelli Utilities Fund Class AAA (NASDAQ:GABUX)
Gabelli Utilities Fund Class AAA (NASDAQ:GABUX) is a fund that invests at least 80% of net assets in domestic or foreign companies that are involved in businesses such as electricity, gas, water, and telecommunications services.
One of the top holdings of Gabelli Utilities Fund Class AAA (NASDAQ:GABUX) is NextEra Energy, Inc. (NYSE:NEE), a Florida-based electric utility firm. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in NextEra Energy, Inc. (NYSE:NEE), with 15 million shares worth more than $1.4 billion.
In addition to Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB), and Microsoft Corporation (NASDAQ:MSFT), NextEra Energy, Inc. (NYSE:NEE) is one of the stocks that hedge funds are monitoring.
5. Janus Henderson High-Yield Fund Class T (NASDAQ:JAHYX)
Janus Henderson High-Yield Fund Class T (NASDAQ:JAHYX) is a fund that invests at least 80% of net assets in high-yield/high-risk securities that are rated below investment grade. These companies offer favorable risk/return characteristics. The fund has more than $1.1 billion in net assets under management with a holdings turnover of 146%.
A top holding of Janus Henderson High-Yield Fund Class T (NASDAQ:JAHYX) is Allegheny Technologies Incorporated (NYSE:ATI), a company that markets specialty metals and related products. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in Allegheny Technologies Incorporated (NYSE:ATI), with 3.8 million shares worth more than $80 million.
4. Vanguard Windsor II Fund Investor Share (NASDAQ:VWNFX)
Vanguard Windsor II Fund Investor Share (NASDAQ:VWNFX) is a fund that invests in companies that fall in the large and mid-cap domain and whose stocks are considered by an advisor to be undervalued. Undervalued stocks are generally trading at prices below their earnings and book value.
A top holding of Vanguard Windsor II Fund Investor Share (NASDAQ:VWNFX) is Microsoft Corporation (NASDAQ:MSFT), a Washington-based technology firm. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT), with 26.8 million shares worth more than $9 billion.
In its Q4 2021 investor letter, Vulcan Value Partners, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“Microsoft Corporation (NASDAQ:MSFT) was a material contributor during the quarter. It is one of the highest quality companies in the world. We believe it has tremendous competitive advantages in its consumer and commercial Microsoft Office products as well as in its server and tools and Azure divisions. Over the last several years, Microsoft Corporation (NASDAQ:MSFT) has been implementing a successful transition from a traditional software license and maintenance revenue model to a subscription revenue model. The company remains competitively entrenched, produces strong free cash flow, and has a strong balance sheet.”
3. Fidelity Securities Fund – Fidelity Blue Chip Growth Fund (NASDAQ:FBGRX)
Fidelity Securities Fund – Fidelity Blue Chip Growth Fund (NASDAQ:FBGRX) is a mutual fund that invests at least 80% of net assets in blue chip large or mid-cap companies. These firms are generally well-known, well-established, and well-capitalized. The fund invests in those stocks that offer above-average growth potential in this sector.
Fidelity Securities Fund – Fidelity Blue Chip Growth Fund (NASDAQ:FBGRX) changes the value of equities in the fund according to the political, market, and economic developments. The fund primarily invests in common stocks.
2. Fidelity Contrafund Fund (NASDAQ:FCNTX)
Fidelity Contrafund Fund (NASDAQ:FCNTX) is a mutual fund that invests in companies whose value the advisor believes is not fully recognized by the public. These firms may be in the growth or value sectors. They may also be domestic or foreign. The fund looks at factors such as financial and industry position, as well as economic conditions to select investments.
A top holding of Fidelity Contrafund Fund (NASDAQ:FCNTX) is Meta Platforms, Inc. (NASDAQ:FB), a metaverse firm. At the end of the fourth quarter of 2021, 224 hedge funds in the database of Insider Monkey held stakes worth $31.8 billion in Meta Platforms, Inc. (NASDAQ:FB), compared to 248 in the preceding quarter worth $38.5 billion.
In its Q4 2021 investor letter, Boyar Value Group, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“Corporate executives can have many different reasons for selling shares (anticipation of tax law changes, philanthropy, diversification, and much more), but the sheer number of billionaire founders who sold shares in 2021 should raise eyebrows and might well be signaling a market top. Bloomberg’s Ben Steverman and Scott Carpenter report not only that Mark Zuckerberg of Meta Platforms, Inc. (NASDAQ:FB) (formerly known as Facebook) sold shares in his company almost every day last year but also that the founders of Google sold ~$3.5 billion worth of stock (the first time either Sergey Brin or Larry Page has sold shares since 2017).”
1. Fidelity Puritan Fund (NASDAQ:FPURX)
Fidelity Puritan Fund (NASDAQ:FPURX) is a mutual fund that invests at least 60% of net assets in stocks and other equity securities and the remainder in bonds and debt securities. The fund has more than $35 billion in net assets under management with a holdings turnover of 55%. The expense ratio for the fund is 0.52%.
A top holding of Fidelity Puritan Fund (NASDAQ:FPURX) is Alphabet Inc. (NASDAQ:GOOG), a diversified technology company. Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 2.9 million shares worth more than $8.5 billion.
In its Q4 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“In contrast, we made a different kind of mistake about a decade ago. Google, now Alphabet Inc. (NASDAQ:GOOG), performed very well for us while we owned it. The company kept outperforming our assumptions and we kept lowering them to be conservative. “Trees do not grow to the sky.” The stock kept going up and our value grew but did not keep pace with the stock. It hit our estimate of fair value and we sold it with a nice gain, patting ourselves on the back. We kept following Alphabet Inc. (NASDAQ:GOOG) and what they actually did over the next several years was roughly double the assumptions we used to value it. Therefore, our value was too conservative, and we sold it too cheaply, missing many years of compounding. Fortunately, we experienced some volatility several years ago that allowed us to purchase Alphabet Inc. (NASDAQ:GOOG) (Google) again with a margin of safety.”
You can also take a peek at Forget Tesla (TSLA): 10 Cheap EV Stocks to Buy Now and 15 Best Consumer Discretionary Stocks to Buy Now.
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Disclosure. None. 10 Most Popular Mutual Funds on Reddit is originally published on Insider Monkey.
