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A first-rate mutual fund portfolio is diversified. It holds funds focusing on U. S. stocks and bonds as well as international securities. It provides value and growth stocks in addition to active and passively managed funds. Most importantly, however, it tilts toward low-fee funds.
Forbes Advisor has created this list of the top 10 mutual funds for investors who want to construct that kind of portfolio on their own.
Our editors are dedicated to providing you with objective assessments and data. Our editorial content is not influenced by advertisers. We measure financial products and companies equally because we employ data-driven methodologies. More information about our editorial policies and the investment process used to determine the ratings can be found below.
Choosing the best mutual funds to invest in can be a daunting task, especially with the ever-changing market landscape. But fear not, this guide will equip you with the knowledge and insights you need to make informed decisions and navigate the world of mutual funds with confidence.
Understanding Mutual Funds:
Before diving into specific funds let’s first understand what they are. A mutual fund is a professionally managed investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks bonds, or other assets. This diversification helps spread risk and potentially enhance returns.
Factors to Consider:
When selecting mutual funds, consider these key factors:
- Investment Objective: What are your financial goals? Are you aiming for long-term growth, income generation, or a balance of both?
- Risk Tolerance: How comfortable are you with potential market fluctuations? Higher risk tolerance allows for potentially higher returns, but also greater volatility.
- Expense Ratio: This fee covers the fund’s operating costs. Lower expense ratios translate to more money working for you.
- Past Performance: While past performance is not a guarantee of future results, it can provide insights into the fund’s management team and strategy.
- Fund Size and Liquidity: Consider the fund’s size and how easily you can buy and sell shares.
Top Mutual Funds for 2024:
Based on a comprehensive analysis of various factors, here are some of the best mutual funds to consider in 2024:
1. Fidelity International Index Fund (FSPSX):
- Expense Ratio: 0.035%
- Dividend Yield: 2.64%
- 10-Year Avg. Ann. Return: 4.99%
This passively managed fund tracks the MSCI EAFE Index, providing broad exposure to international developed markets. Its low expense ratio and solid track record make it an attractive option for investors seeking global diversification.
2. Fidelity U.S. Sustainability Index Fund (FITLX):
- Expense Ratio: 0.11%
- Dividend Yield: 1.01%
- Avg. Ann. Return Since Inception (May 2017): 14.74%
This fund invests in companies that meet environmental, social, and governance (ESG) criteria. It offers exposure to the U.S. stock market while aligning with sustainable investing principles.
3. Schwab S&P 500 Index Fund (SWPPX):
- Expense Ratio: 0.02%
- Dividend Yield: 1.29%
- 10-Year Avg. Ann. Return: 12.99%
This fund tracks the S&P 500 Index, providing broad exposure to the largest U.S. companies. Its rock-bottom expense ratio and strong performance make it a top choice for investors seeking market-matching returns.
4. Shelton Nasdaq-100 Index Fund Investor (NASDX):
- Expense Ratio: 0.52%
- Dividend Yield: 0.39%
- 10-Year Avg. Ann. Return: 18.21%
This fund tracks the Nasdaq-100 Index, providing exposure to the 100 largest non-financial companies listed on the Nasdaq stock exchange. Its focus on technology and growth stocks has delivered impressive returns over the past decade.
5. Schwab Fundamental US Large Company Index Fund (SFLNX):
- Expense Ratio: 0.25%
- Dividend Yield: 1.70%
- 10-Year Avg. Ann. Return: 11.71%
This fund takes a fundamental approach to investing, selecting large-cap stocks based on factors like profitability, growth, and valuation. Its value-oriented strategy has outperformed the broader market over the long term.
6. Fidelity Intermediate Municipal Income Fund (FLTMX):
- Expense Ratio: 0.35%
- Dividend Yield: 2.47%
- 10-Year Avg. Ann. Return: 2.28%
This fund invests in intermediate-term municipal bonds, offering tax-exempt income to investors. Its experienced management team and focus on credit quality make it a solid choice for income-oriented investors.
7. Dodge & Cox Income Fund (DODIX):
- Expense Ratio: 0.41%
- Dividend Yield: 4.06%
- 10-Year Avg. Ann. Return: 2.52%
This actively managed bond fund has a long history of delivering consistent returns. Its focus on credit quality and diversification helps mitigate risk while generating income.
8. Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX):
- Expense Ratio: 0.21%
- Dividend Yield: 4.73%
- 10-Year Avg. Ann. Return: 2.94%
This fund invests in long-term investment-grade bonds, offering a balance of income and capital appreciation potential. Its low expense ratio and focus on quality bonds make it an attractive option for long-term investors.
9. Schwab Fundamental US Small Company Index (SFSNX):
- Expense Ratio: 0.25%
- Dividend Yield: 1.33%
- 10-Year Avg. Ann. Return: 8.81%
This fund takes a fundamental approach to investing in small-cap stocks, seeking out companies with strong growth potential and attractive valuations. Its value-oriented strategy has outperformed the small-cap market over the long term.
10. T. Rowe Price Mid-Cap Growth Fund (RPMGX):
- Expense Ratio: 0.77%
- Dividend Yield: 0.05%
- 10-Year Avg. Ann. Return: 11.33%
This actively managed mid-cap growth fund has a proven track record of outperforming its benchmark. Its focus on growth stocks with sustainable business models has delivered impressive returns for investors.
Choosing the best mutual funds for your portfolio requires careful consideration of your individual circumstances and investment goals. By understanding the key factors and researching various options, you can make informed decisions and build a diversified portfolio that aligns with your financial objectives. Remember, investing involves risk, and past performance is not a guarantee of future results. Always conduct thorough research and consult with a financial advisor before making any investment decisions.
Why Invest in Mutual Funds?
For many individual investors, mutual funds are a good option because of their appealing feature set. These include:
- Diversification. Diversification can be summed up as “never put all your eggs in one basket.” This strategy is embodied by mutual funds, which own a portfolio of securities covering a wide range of businesses and sectors. This helps to lower risk and potentially boost returns.
- Affordability. Mutual funds often have affordable annual fees and minimal investment requirements.
- Professional management. Some lack the necessary time and expertise to oversee a diverse investment portfolio. Upon purchasing shares of a mutual fund, your fees enable qualified managers to select the fund’s securities and oversee the assets during both prosperous and challenging market times.
- Liquidity. Owning mutual fund shares allows you to easily redeem them whenever you’d like. Your shares will always be repurchased by the fund for the current NAV plus any redemption costs.
Investing in a mutual fund provides immediate diversification because each dollar is allocated equally across the fund’s underlying securities. Thus, your $1 will be distributed among all 100 securities even if you invest $1 in a fund that has 100 securities. Comparably, an investor with $100,000 in the fund will receive the same professional management for $1.
How To Invest in Mutual Funds
Similar to stocks, mutual funds can be purchased through an online broker; however, most people purchase mutual funds through their 401(k) or IRA.
Your investment objectives should guide your choice of mutual fund type when making an investment in mutual funds. For example, stock mutual funds with greater growth potential may be the best choice for long-term objectives decades from now, but bond funds may be more stable for short-term objectives within the next few years.
Also keep an eye on fees. Remember that fees reduce overall returns. The industry average expense ratio is 0. 57%, but many funds charge much less. Even funds with no expense ratio exist, like Fidelity Investment’s Zero Funds.
Top 3 Mutual Funds | Explained By CA Rachana Ranade
FAQ
What mutual fund has the highest return?
|
Ticker
|
Name
|
5-year return (%)
|
|
STSEX
|
BlackRock Exchange BlackRock
|
16.27%
|
|
USBOX
|
Pear Tree Quality Ordinary
|
16.13%
|
|
FGLGX
|
Fidelity Series Large Cap Stock
|
16.08%
|
|
PRCOX
|
T. Rowe Price U.S. Equity Research
|
16%
|
Which mutual fund has the highest 5 year return?
|
Fund Name
|
3 Years Return
|
5 Years Return
|
|
Tata Infrastructure Fund (G)
|
33.7%
|
25.5%
|
|
Bank of India ELSS Tax Saver Fund (G)
|
25.8%
|
25.2%
|
|
DSP India T I G E R Fund (G)
|
35.8%
|
24.8%
|
|
Nippon India Growth Fund (G)
|
29.6%
|
24.7%
|
Which mutual fund is best currently?
|
FUND
|
NAV
|
|
NIPPON INDIA GROWTH FUND – Direct Plan – Growth EQUITY
|
3663.85
|
|
Mahindra Manulife Mid Cap Unnati Yojana – Direct – Growth EQUITY
|
31.6688
|
|
Edelweiss Mid Cap Fund – Direct Plan – Growth EQUITY
|
91.396
|
|
SUNDARAM MID CAP FUND Direct Plan – Growth EQUITY
|
1227.55
|
Which mutual funds give 30% return?
|
Scheme
|
Current value of Rs 10,000 monthly SIP (Rs)
|
XIRR(%)
|
|
Quant Small Cap Fund
|
17,94,960.93
|
46.15%
|
|
Nippon India Small Cap Fund
|
14,76,067.92
|
37.47%
|
|
Quant Mid Cap Fund
|
13,77,130.72
|
34.45%
|
|
Bank of India Small Cap Fund
|
13,76,835.28
|
34.44%
|
What are the best mutual funds to invest in?
Other strong contributors for Focused Dynamic Growth, one of the best mutual funds, were innovators like Tesla ( TSLA) and Square ( SQ ). Some holdings, including DocuSign ( DOCU ), were big beneficiaries of key secular trends like the digitization of business activities.
Where can I get the 2020 best mutual funds Awards logo?
Click on the category name to see the all the Best Mutual Funds Awards winners. The 2020 Best Mutual Funds Awards logo and accolade are available for licensing through Investor’s Business Daily’s partner, The YGS Group. For more information and ordering, contact The YGS Group at [email protected] or 800-290-5460.
Should you invest in a mutual fund?
NerdWallet’s recommendation is to invest primarily through mutual funds, especially index funds, which passively track a market index such as the S&P 500. The mutual funds above are actively managed, which means they try to beat stock market performance — a strategy that often fails. » Ready to invest?
Which investments make the most sense for your portfolio?
But you should always do your homework to explore which investments will make the most sense for your portfolio. Stock mutual funds, also known as equity mutual funds, carry the highest potential rewards, but also higher inherent risks — and different categories of stock mutual funds carry different risks.