Inflation In Check: 3 Utility Mutual Funds To Buy Now
Zacks Investment Research | Mar 22, 2019 07:23AM ET
Commendable U.S. economic growth, defying slowdowns elsewhere in the world, and solid job additions were expected to lift inflation. And the Fed was expected to tackle the rise in prices of goods and services by raising interest rates. This would have customarily led to an uptick in fixed income yields. Utility stocks, in the meanwhile, better known as bond substitutes, were expected to be affected by this. But, the present scenario is quite the opposite.
After all, inflation has remained relatively contained. U.S. consumer prices increased marginally last month, supporting the case for the Fed to hold off further hiking rates. Meanwhile, core inflation came in at 2.1%. The Fed stated that the central bank will stick to its patient stance on monetary policy as long as core inflation continues to be near 2%.
At the same time, inflation isn’t rising anytime soon as technology giants continue to suppress inflationary pressure. Just look at how Amazon (NASDAQ:AMZN) is building pressure on all consumer products. So, with inflation remaining in check, utility stocks have huge room to rally.
3 Best Utility Mutual Funds to Buy Now
Taking utilities’ bullish trend into consideration, it will be prudent to invest in mutual funds with a major holding in such companies. But, why choose mutual funds over stocks? This is because funds reduce transaction costs for investors. Funds also diversify their portfolio without the numerous commission charges that stocks need to bear (read: Zacks Investment Research
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