3 BlackRock Mutual Funds to Buy on Rate Cut Continuation

BlackRock Inc. BLK was founded in 1988. Based in New York City, the financial giant offers investment, advisory and risk management solutions in various asset classes like equity, fixed income, cash management, alternative investment and real estate. It has more than 19,000 employees and is present in more than 36 countries.

Inflation has been slowing down in recent months, and other economic indicators have also been suggestive enough for the Fed to finally announce its first rate cut in its September meeting. Currently, market participants expect further rate cuts before the end of the year.

Also, the financial sector has thrived over the past 12 months. The Financial Select Sector SPDR (XLF) has grown 21.8% year to date and 38.8% over the 12 months ended Sep. 30, 2024. In this environment, BlackRock, one of the world’s largest asset managers, is poised to do well.

On Oct. 11, BlackRock reported having $11.5 trillion worth of assets under management as of Sep 30, 2024. It reported second-quarter 2024 adjusted earnings of $11.46 per share, surpassing the Zacks Consensus Estimate of $10.34. Revenues in the quarter came in at $5.2 billion, beating the Zacks Consensus Estimate of $5 billion. The figure increased 15% year over year.

BLK’s continued efforts to strengthen the iShares and ETF operations and restructure its actively managed equity business are aiding the company's growth. The company is preparing to launch a more than $30 billion artificial intelligence (AI) investment fund with tech behemoth Microsoft to build data centers and energy projects to meet growing AI-related demands.

BLK’s exploits in the crypto scene have also been noteworthy. The company is largely credited with rekindling interest in launching spot Bitcoin ETFs when it filed to launch a product in June 2023. With the SEC finally allowing spot Bitcoin ETFs to go mainstream in January, BlackRock has emerged as one of the most prominent holders of Bitcoins.

Hence, investing in BlackRock mutual funds may provide the much-required stability and growth potential in a market that is expected to do well in the coming months. Astute investors should consider such funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

We have thus selected three mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000, as well as carry a low expense ratio.

BlackRock International Dividend BREAX seeks long-term capital appreciation by investing in dividend-paying equity securities issued by foreign companies of any market capitalization and similar derivatives.

Olivia Treharne has been the lead manager of BREAX since February 2020. The three top holdings for BREAX are Taiwan Semiconductor (5.3%), Novo Nordisk (4.7%) and AstraZeneca (3.9%).

BREAX’s 3-year and 5-year annualized returns are 5.8% and 8.9%, respectively, and its net expense ratio is 0.92%. BREAX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

BlackRock Advantage Large Cap Group Investor BMCAX seeks long-term capital appreciation by investing in large-cap equity securities of U.S. issuers and derivatives that have similar economic characteristics. BMCAX advisors define large-cap as those equity securities that, at the time of purchase, have a market capitalization within the range of companies included in the Russell 1000 Growth Index.

Raffaele Savi has been the lead manager of BMCAX since June 2017. The three top holdings for BMCAX are Microsoft (12.8%), Apple (10.1%) and Nvidia (5.9%).

BMCAX’s 3-year and 5-year annualized returns are 7.4% and 17%, respectively, and its net expense ratio is 0.87%. BMCAX has a Zacks Mutual Fund Rank #1.

BlackRock Large Cap Focus Value MRBVX seeks capital appreciation along with current income by investing most of its assets in large-cap equity securities and derivatives that have economic characteristics similar to those of such securities. MRBVX advisors primarily choose to invest in equity securities of undervalued companies.

Tony DeSpirito has been the lead manager of MRBVX since November 2019. The three top holdings for MRBVX are Citigroup (3.9%), Wells Fargo (3.8%) and Medtronic (2.9%).

MRBVX’s 3-year and 5-year annualized returns are 8.3% and 11.5%, respectively, and its net expense ratio is 1.17%. MRBVX has a Zacks Mutual Fund Rank #1.

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