In this article we discuss the 10 mutual funds to buy in 2022.
Many investors have been dismayed by the volatility associated with owning individual stocks in the present macroeconomic environment. For these investors, mutual funds are a great way of spreading overall risk while maximizing gains. The inflows into mutual funds in 2021, one of the most volatile years in stock market history, outlines this better. According to a report by financial services firm Morningstar, flows into long-term mutual funds and exchange-traded funds reached a high of $1.2 trillion last year, breaking a record stretching back to 1993.
Overall, passively managed funds — where investment securities are not chosen by a manager but automatically selected to match an index — registered inflows of $958 billion in 2021, around $700 billion more than active funds. Passive equity funds based in the United States had intakes of almost $356 billion last year, compared to active funds that registered outflows of $195 billion during the period. 2021 was also a good year for ESG (environmental, social, and governance) funds which had an annual intake of $71 billion, up from $51 billion in 2020.
As inflation rises and the markets become more volatile in 2022, investors are looking towards some top mutual funds to diversify their portfolios. The popularity of individual stocks among top funds gives a general indication of where things are headed. Some of the top stocks among mutual funds for 2022 include JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), and Exxon Mobil Corporation (NYSE:XOM), among others discussed in detail below.
Our Methodology
The mutual funds that are expected to perform well in 2022 considering the macroeconomic environment were preferred for the list. The top holdings of each fund are mentioned alongside other details for further clarity.
Data from around 900 elite hedge funds tracked by Insider Monkey was used to quantify the hedge fund sentiment around each top holding.
Source:Pixabay
Mutual Funds to Buy in 2022
10. Voya Russell Large Cap Index Portfolio Class I (NASDAQ:IIRLX)
Voya Russell Large Cap Index Portfolio Class I (NASDAQ:IIRLX) is an Arizona-based mutual fund that invests at least 80% of net assets in stocks present on the Russell Top 200 Index. The fund primarily focuses on investments related to equities, convertible securities, and other derivatives tied to the index.
Voya Russell Large Cap Index Portfolio Class I (NASDAQ:IIRLX) has more than $1.27 billion in net assets under management with a holdings turnover of 6%. The expense ratio for the fund is 0.36%.
One of the premier holdings of Voya Russell Large Cap Index Portfolio Class I (NASDAQ:IIRLX) is Microsoft Corporation (NASDAQ:MSFT), the Washington-based tech giant. 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 25 million shares worth more than $7 billion.
Just like JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), and Exxon Mobil Corporation (NYSE:XOM), Microsoft Corporation (NASDAQ:MSFT) is one of the stocks on the radar of elite investors.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft Corporation (NASDAQ:MSFT) in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. Microsoft Corporation (NASDAQ:MSFT) continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives Microsoft Corporation (NASDAQ:MSFT) the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
9. Hartford Core Equity Fund Class R5 (NASDAQ:HGITX)
Hartford Core Equity Fund Class R5 (NASDAQ:HGITX) is a Connecticut-based mutual fund that invests at least 80% of net assets in common stocks present on the S&P 500 Index. The fund also has a provision of investing in a broad range of market capitalizations.
Hartford Core Equity Fund Class R5 (NASDAQ:HGITX) has more than $11.8 billion in net assets under management with a holdings turnover of 22%. The expense ratio for the fund is 0.48%.
One of the top holdings of Hartford Core Equity Fund Class R5 (NASDAQ:HGITX) is Apple Inc. (NASDAQ:AAPL), the California-based technology company. At the end of the third quarter of 2021, 120 hedge funds in the database of Insider Monkey held stakes worth $146 billion in Apple Inc. (NASDAQ:AAPL).
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple Inc. (NASDAQ:AAPL) is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple Inc. (NASDAQ:AAPL) was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
8. Voya Russell Large Cap Growth Index Portfolio Class I (NASDAQ:IRLNX)
Voya Russell Large Cap Growth Index Portfolio Class I (NASDAQ:IRLNX) is an Arizona-based mutual fund that invests at least 80% of net assets in firms on the Russell Top 200 Growth Index.
Voya Russell Large Cap Growth Index Portfolio Class I (NASDAQ:IRLNX) has more than $1.54 billion in net assets under management with a holdings turnover of 13%. The expense ratio for the fund is 0.43%.
A flagship holding of Voya Russell Large Cap Growth Index Portfolio Class I (NASDAQ:IRLNX) is Visa Inc. (NYSE:V), a California-based payments firm. At the end of the third quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $26 billion in Visa Inc. (NYSE:V).
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa Inc. (NYSE:V).”
7. Fidelity NASDAQ Composite Index Fund (NASDAQ:FNCMX)
Fidelity NASDAQ Composite Index Fund (NASDAQ:FNCMX) is a Boston-based mutual fund that invests at least 80% of net assets in companies that trade on the NASDAQ exchange. The fund also lends securities to earn income.
Fidelity NASDAQ Composite Index Fund (NASDAQ:FNCMX) has more than $14.2 billion in net assets under management with a holdings turnover of 17%. The expense ratio for the fund is 0.29%.
One of the top holdings of Fidelity NASDAQ Composite Index Fund (NASDAQ:FNCMX) is Comcast Corporation (NASDAQ:CMCSA), a media and technology firm. Among the hedge funds being tracked by Insider Monkey, New York-based firm Eagle Capital Management is a leading shareholder in Comcast Corporation (NASDAQ:CMCSA) with 29 million shares worth more than $1.6 billion.
In its Q1 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and Comcast Corporation (NASDAQ:CMCSA) was one of them. Here is what the fund said:
“Comcast Corporation (NASDAQ:CMCSA) is the Largest cable provider in the U.S. and is the dominant internet access provider in the markets it serves. Though Comcast Corporation (NASDAQ:CMCSA) will likely see further declines in cable subscriptions due to ongoing cord-cutting, it should be able to off set that lost revenue by growing internet access customers and instituting higher pricing. The pandemic has increased the importance of a fast internet connection, with more content streaming to homes at increasingly higher quality. Comcast Corporation (NASDAQ:CMCSA) made significant upgrades early on, allowing it to quickly deploy new technology and increase speeds to meet the evolving needs of its customers.”
6. Shelton Capital Management Nasdaq-100 Index Fund Direct Shares (NASDAQ:NASDX)
Shelton Capital Management Nasdaq-100 Index Fund Direct Shares (NASDAQ:NASDX) is a California-based mutual fund that invests at least 80% of net assets in stocks on the NASDAQ-100 Index. The index includes 100 non-financial companies listed on the NASDAQ market according to their market capitalization.
Shelton Capital Management Nasdaq-100 Index Fund Direct Shares (NASDAQ:NASDX) has more than $1.31 billion in net assets under management with a holdings turnover of 12%. The expense ratio for the fund is 0.50%.
One of the top holdings of Shelton Capital Management Nasdaq-100 Index Fund Direct Shares (NASDAQ:NASDX) is Meta Platforms, Inc. (NASDAQ:FB), the California-based technology company. At the end of September, 248 funds in the Insider Monkey database were long Meta Platforms, Inc. (NASDAQ:FB) with stakes worth $38 billion.
Alongside JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), and Exxon Mobil Corporation (NYSE:XOM), Meta Platforms, Inc. (NASDAQ:FB) is one of the stocks attracting the attention of smart investors.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
5. Fidelity 500 Index Fund (NASDAQ:FXAIX)
Fidelity 500 Index Fund (NASDAQ:FXAIX) is a Boston-based mutual fund that invests at least 80% of net assets in firms listed on the S&P 500 Index. The fund also lends securities to earn income.
Fidelity 500 Index Fund (NASDAQ:FXAIX) has more than $399 billion in net assets under management with a holdings turnover of 7%. The expense ratio for the fund is 0.01%.
A top holding of Fidelity 500 Index Fund (NASDAQ:FXAIX) is JPMorgan Chase & Co. (NYSE:JPM), the New York-based finance firm. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in JPMorgan Chase & Co. (NYSE:JPM) with 7 million shares worth more than $1.1 billion.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and JPMorgan Chase & Co. (NYSE:JPM) was one of them. Here is what the fund said:
“After a strong performance in 2019, we wrote this about our bank stocks in last year’s report: “There will be another recession sooner than later, and our banks will see larger loans losses, but we think this is more than priced into the stock, and our banks are well reserved for that eventuality.” Little did we know “sooner” really meant “a few weeks from now.” Despite the economic shock, the banks still have huge capital cushions that can absorb large loan losses. Our remaining bank investments, JPMorgan Chase & Co. (NYSE:JPM) and Bank of America, increased their reserves significantly at the beginning of the Covid-19 crisis in anticipation of imminent loan defaults, but with the government stimulus and perhaps a more resilient economy than many would have guessed, actual loan losses are up only slightly. They might happen later in 2021, but with an additional stimulus package and the vaccine rolling out, the large-scale losses may not be as bad as most people predicted. The bigger drag on the banks’ earnings power is lower rates, which in our opinion will persist for a long time. Despite this drag, we estimate both JPMorgan Chase & Co. (NYSE:JPM) and Bank of America will continue to grow revenue and earnings over the next few years, while we believe their stocks remain bargains in a somewhat expensive market. JPMorgan’s earnings per share declined 17% last year, and its stock returned -5.5%. Bank of America’s earnings, which are more sensitive to interest rates, were down 32%, and its stock returned -11.6%.”
4. Vanguard Windsor II Fund Investor Share (NASDAQ:VWNFX)
Vanguard Windsor II Fund Investor Share (NASDAQ:VWNFX) is a Pennsylvania-based mutual fund that invests at least 80% of net assets in small cap and large cap firms whose stocks are considered undervalued by investment advisors.
Vanguard Windsor II Fund Investor Share (NASDAQ:VWNFX) has more than $57 billion in net assets under management with a holdings turnover of 61%. The expense ratio for the fund is 0.34%.
A top holding of Vanguard Windsor II Fund Investor Share (NASDAQ:VWNFX) is Citigroup Inc. (NYSE:C), the New York-based banking firm. Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Citigroup Inc. (NYSE:C) with 28 million shares worth more than $1.9 billion.
In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE:C) was one of them. Here is what the fund said:
“We fully exited position in Citigroup Inc. (NYSE:C). Global financial services company Citigroup Inc. (NYSE:C) made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”
3. Schwab Fundamental US Large Company Index Fund (NASDAQ:SFLNX)
Schwab Fundamental US Large Company Index Fund (NASDAQ:SFLNX) is a San Francisco-based mutual fund that invests at least 80% of net assets in companies on the Russell RAFI US Large Company Index. The index ranks firms according to an overall score based on fundamentals.
Schwab Fundamental US Large Company Index Fund (NASDAQ:SFLNX) has more than $7 billion in net assets under management with a holdings turnover of 13%. The expense ratio for the fund is 0.25%.
A top holding of Schwab Fundamental US Large Company Index Fund (NASDAQ:SFLNX) is Exxon Mobil Corporation (NYSE:XOM), the Texas-based oil and gas company. At the end of the third quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $4.6 billion in Exxon Mobil Corporation (NYSE:XOM).
In its Q1 2021 investor letter, Harding Loevner highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:
“We felt that our remaining energy holding, Exxon Mobil Corporation (NYSE:XOM), with its stronger balance sheet, was in a better position to ride out the cyclical slump in oil demand and even perhaps take advantage of it by investing counter-cyclically. While Exxon Mobil Corporation (NYSE:XOM) does plan to increase capital expenditure, we’ve been disappointed in its regrettable failure to address ongoing emission trends, which reflects poorly on management’s foresight. As a result, we sold our Exxon Mobil Corporation (NYSE:XOM) holdings.”
2. JPMorgan Equity Income Fund Class A (NASDAQ:OIEIX)
JPMorgan Equity Income Fund Class A (NASDAQ:OIEIX) is a New York-based mutual fund that invests at least 80% of net assets in companies that pay a regular dividend. The fund mostly invests in large-cap firms though it is also allowed to invest in smaller firms.
JPMorgan Equity Income Fund Class A (NASDAQ:OIEIX) has more than $46 billion in net assets under management with a holdings turnover of 22%. The expense ratio for the fund is 0.98%.
A top holding of the fund is UnitedHealth Group Incorporated (NYSE:UNH), the Minnesota-based healthcare firm. At the end of the third quarter of 2021, 95 hedge funds in the database of Insider Monkey held stakes worth $11.7 billion in UnitedHealth Group Incorporated (NYSE:UNH).
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and UnitedHealth Group Incorporated (NYSE:UNH) was one of them. Here is what the fund said:
“A good way to conceptualize how we think about portfolio construction is to picture a pyramid. At the bottom of the pyramid are the durable compounding growth companies that form the strong foundation, resilience and consistency for the Strategy. We think these companies should comprise just under half of portfolio assets and feature annual revenue growth rates ranging from two times GDP up to 20% as well as healthy free cash flow generation.
UnitedHealth Group Incorporated (NYSE:UNH), a name we have owned in the Strategy since 1992, is a good example of a long-term compounder, having grown its revenue base from approximately $600 million to north of $260 billion over that time frame. UnitedHealth Group Incorporated (NYSE:UNH) remains constantly focused on investing in new growth drivers such as telemedicine and health care analytics. Broadcom and Comcast have delivered similar long-term appreciation through a combination of organic growth, capital deployment into new and adjacent opportunities through merger and acquisition activity as well as returning capital to shareholders through buybacks and dividends.”
1. Fidelity Puritan Fund (NASDAQ:FPURX)
Fidelity Puritan Fund (NASDAQ:FPURX) is a Boston-based mutual fund that invests at least 60% of net assets in stocks and other securities and the remainder in bonds. The fund invests at least 25% of total assets in fixed-income senior securities.
Fidelity Puritan Fund (NASDAQ:FPURX) 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 Mastercard Incorporated (NYSE:MA), a firm that provides transaction processing solutions. Among the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE:MA) with 5.8 million shares worth more than $2 billion.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard Incorporated (NYSE:MA) make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
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 Mutual Funds to Buy in 2022 is originally published on Insider Monkey.
