The first quarter earnings season was not very encouraging and the official commencement of the second quarter earnings season too had a dismal start. After beating bottom-line estimates for four consecutive quarters, aluminum giant Alcoa finally missed the earnings estimates.

To add to the disappointment, the second quarter estimates have been moving lower. Management has consistently provided lower guidance. On that note, it can be said that under promising is a good thing to come out with outperforming results. The declining trend in second quarter earnings is not unique this time though. Also, the magnitude of lower revisions this time is lower compared to the trend ahead of the first quarter.

The spotlight is already on the second quarter earnings, and the action heightens starting next week. Before we brace ourselves for a very busy next couple of weeks, let’s look at some buy-ranked mutual funds that boast high average EPS growth.

Q2 Earnings Expectations

Earnings for the S&P 500 components are projected to decline 6.7% year over year while revenues may drop 6%. Growth is projected to suffer across 9 out of 16 sectors. These 9 sectors may incur earnings decline.

Again, the energy sector might be the biggest laggard as earnings for the sector may slump 64% with a decline of 41.5% in revenues. The finance sector however is expected to see 2.6% higher earnings, though sales may drop 5%. Technology on the other hand may incur a 1.6% drop in earnings, but revenues will improve 0.8%. Meanwhile, taking the energy sector out, total earnings for the S&P 500 may edge up 0.5% with 0.3% decline in revenues.

Despite negative revisions, and as mentioned earlier, the magnitude of revisions downward in second quarter is lower than first quarter. For the second quarter, the magnitude of negative revision is 3.1%. This compares favorably with 8.3% lower revisions in first quarter 2015 and 5.9% in first quarter 2014.

Run Up to the Second Quarter

The first quarter had major headwinds to deal with. The GDP numbers were not so impressive and companies had a lot to worry about stronger dollar. Strength in the U.S. dollar had a huge impact on the trade deficit over the first quarter. While a stronger dollar dragged down the export demand in the first quarter, it also boosted import demand as it made foreign goods cheaper.

The ‘dollar scapegoating’ was a theme in reading the first quarter results. Weakness in first quarter earnings numbers was attributed to the strength of the dollar. The large-cap S&P 500 companies earn about 40% of their revenues from outside the US. Total first quarter earnings for the 498 S&P 500 members were up 2.4% on 3.3% lower revenues. Only 62% could beat EPS estimates and only 42.4% outperformed revenue expectations.This time however, the dollar should be of greater importance. In the run up to the second quarter, markets were mostly worried about the Greece debt deal crisis. However, this should not affect the US multinationals. Also, the economy has been promising this time, with quality data from housing and retail sectors.

Read: Top 10 Mutual Fund Performers of 1H 2015

5 Mutual Funds with the Best Average EPS Growth

Below we present 5 mutual funds that currently have the best average EPS growth. These funds carry either a carry a Zacks Mutual Fund Rank #1 (Strong Buy) orZacks Mutual Fund Rank #2 (Buy).

Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but the likely future success of the fund.

The minimum initial investment is within $5000. These funds are not only in the green so far this year, but have positive total returns over the last 1, 3 and 5 year periods.

Fidelity Select Medical Delivery Portfolio (FSHCX - MF report) seeks long-term capital growth. FSHCX invests a major portion of its assets mainly involved in operations related to hospitals, nursing homes and other organizations engaged in providing health care services. FSHCX primarily focuses on acquiring common stocks of companies throughout the globe.

FSHCX currently carries a Zacks Mutual Fund Rank #2. The year-to-date and 1-year gains are 13.3% and 30.8%. Meanwhile, the 3 and 5 year annualized returns are 24.4% and 22.3%. The annual expense ratio of 0.79% is lower than the category average of 1.37%.

The average EPS growth is 22.4%. Among the top five holdings, UnitedHealth Group, McKesson, Cigna and Cardinal Health have average earnings surprise for the past four quarters of 8.3%, 6.4%, 5.5% and 4.1%.

Rydex S&P SmallCap 600 Pure Growth A (RYSGX - MF report) seeks results that are at par (excluding fees and expenses) with the S&P SmallCap 600 Pure Growth Index’s performance. A lion’s share of its assets is invested in the common stock of companies listed on the underlying index.

RYSGX currently carries a Zacks Mutual Fund Rank #2. The year-to-date and 1-year gains are 9.3% and 9.6%. Meanwhile, the 3 and 5 year annualized returns are 16.4% and 17.2%. The annual expense ratio of 1.51% is however higher than the category average of 1.35%.

The average EPS growth is 19.5%. Among the top five holdings, Lannett, Skechers USA, Taser International, Gentherm and Take-Two Interactive Software have average earnings surprise for the past four quarters of 4.7%, 22.5%, 50.6%, 27.5% and 88.9%.

Fidelity Independence (FDFFX - MF report) invests primarily in common stocks of domestic and foreign issuers. FDFFX realizes capital gains without considering the tax consequences to shareholders. The management is not constrained by any particular investment style and may invest in either 'growth' stocks or 'value' stocks or both.

FDFFX currently carries a Zacks Mutual Fund Rank #2. The year-to-date and 1-year gains are 3% and 4.7%. Meanwhile, the 3 and 5 year annualized returns are 20.7% and 17%. The annual expense ratio of 0.73% is lower than the category average of 1.19%.

The average EPS growth is 19.4%. Among the top five holdings, Apple, Gilead Sciences, Medivation, Celgene and American Airlines Group have average earnings surprise for the past four quarters of 9.6%, 15.5%, 23.2%, 4.2% and 1.6%.

Fidelity Select Leisure Portfolio (FDLSX - MF report) seeks capital growth. FDLSX invests at least 80% of assets in common stocks of companies principally engaged in the design, production, or distribution of goods or services in the leisure industries.

FDLSX currently carries a Zacks Mutual Fund Rank #1. The year-to-date and 1-year gains are 7.2% and 13.4%. Meanwhile, the 3 and 5 year annualized returns are 19.7% and 19.6%. The annual expense ratio of 0.8% is lower than the category average of 1.48%.

The average EPS growth is 18.3%. Among the top five holdings, Starbucks, Yum Brands, Chipotle Mexican Grill Inc Class A and Wyndham Worldwide have average earnings surprise for the past four quarters of 0.8%, 1.5%, 7.8% and 5.1%.

Janus Forty A (JDCAX - MF report) invests in a group of 20-40 common stocks that have growth potential. JDCAX may invest in companies of all sizes, ranging from prominent firms to smaller and emerging growth firms.

JDCAX currently carries a Zacks Mutual Fund Rank #1. The year-to-date and 1-year gains are 6.3% and 15.8%. Meanwhile, the 3 and 5 year annualized returns are 17.9% and 15.1%. The annual expense ratio of 0.92% is lower than the category average of 1.19%.

The average EPS growth is 17.7%. Among the top five holdings, Lowe's Companies, Delphi Automotive PLC, Valeant Pharmaceuticals International and Endo International PLC have average earnings surprise for the past four quarters of 0.7%, 4.2%, 80.4% and 6.6%.