The U.S. stock market continues its upward momentum, mostly driven by strong corporate earnings and AI-driven growth. However, the ongoing federal government shutdown and uncertainty over the U.S.-China trade war have led to a rise in market volatility. The Cboe Volatility Index (VIX) staying above 20 indicates heightened investor uncertainty.
Due to the government shutdown, a “data blackout” has stalled the release of key economic data such as inflation and employment figures, which are normally vital for market assessment. This is making the Federal Reserve’s interest rate outlook harder to predict. The gross national debt has hit a new high of over $38 trillion for the first time, as the government shutdown has intensified the problem.
Amid such volatile market conditions, investors looking for higher returns over a long-term period can consider no-load mutual funds like Fidelity Select Semiconductors Portfolio FSELX, DWS Science and Technology KTCSX and Fidelity Series Blue Chip Growth Fund FSBDX, as these have a low expense ratio, which can translate into higher returns. Other factors such as the funds’ performance history, investment style and risk tolerance also act in their favor.
Investors with disposable income who wish to diversify their portfolios can opt for no-load mutual funds. These passively managed funds don’t have any commission fees or any other charges for buying and selling that are generally associated with actively managed funds.
The sales charges — referred to as a “front-end load,” which is charged upon purchasing shares, or “back-end load,” which is charged upon the selling of shares — are absent in such funds because shares are distributed directly by the investment company, instead of any third-party involvement like a broker, advisor or other professionals.
Even a few additional basis points saved in fees can boost the overall return by minimizing expenses. However, charges like the fund’s expense ratio, 12b-1 fees for marketing, distribution, and service, redemption fees, exchange fees, and account fees are commonly charged even if there is no load.
The load charges are generally within the range of 0-6%. To understand the math, let’s assume an investor wants to invest $1000 in a mutual fund that has a 5% entry and exit load. Then, $950 ($1000-$50 [5% of $1000]) is left with the mutual fund house to invest. Now, let’s assume the fund has given a 15% return over the year. So, the current value of the portfolio is $1092.5 ($950+ $142.5 [15% of $950]). Now, when an exit load of 5% is applied, the investor is left with $1037.87 ($1092.5-$54.63 [5% of $1092.5]).
According to the above hypothesis, the returns earned by investors with front and back loads are 3.78%, whereas they could have enjoyed a much higher return without the load.
We have thus selected three no-load mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges primarily associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Semiconductors Portfolio invests most of its net assets in common stocks of domestic and foreign companies that areprincipally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX chooses to invest in stocks based on fundamental analysis factors such as each issuer’s financial condition and industry position, and market and economic conditions.
Adam Benjamin has been the lead manager of FSELX since March 15, 2020. Most of the fund’s exposure was to companies like NVIDIA (24.7%), Broadcom (11.9%) and NXP Semiconductors (6.3%) as of May 31, 2025.
FSELX’s three-year and five-year annualized returns are nearly 56.1% and 34.6%, respectively. FSELX has an annual expense ratio of 0.62%.
To see how this fund performed compared to its category and other 1, 2, and 3 Ranked Mutual Funds, please click here.
DWS Science and Technology fund invests most of its assets, along with borrowings, if any, in common stocks and initial public offerings of domestic science and technology companies, irrespective of their market capitalization. KTCSX advisors may also invest in foreign companies from the technology sector or other industries within the technology sector from developed and emerging market economies.
Sebastian P. Werner has been the lead manager of KTCSX since Dec. 1, 2017. Most of the fund’s exposure was in companies like Microsoft (10.7%), NVIDIA (10.5%) and Meta Platforms (9.7%) as of July 31, 2025.
KTCSX’s three-year and five-year annualized returns are 38.6% and 18.5%, respectively. KTCSX has an annual expense ratio of 0.68%.
Fidelity Series Blue Chip Growth Fund invests most of its net assets in common stocks of blue-chip companies, which generally have large or medium market capitalizations. FSBDX advisors consider blue-chip companies as those that are well-known, well-established and well-capitalized.
Sonu Kalra has been the lead manager of FSBDX since Nov. 7, 2013. Most of the fund’s exposure was in companies like NVIDIA (16.7%), Microsoft (10.1%) and Amazon.com (8.6%) as of July 31, 2025.
FSBDX’s three-year and five-year annualized returns are 36.6% and 18.2%, respectively. FSBDX has an annual expense ratio of 0.01%.
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This article originally published on Zacks Investment Research (zacks.com).
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