Choosing the right mutual fund can be tricky. An elongated process with multiple screens, lists, and calculation might leave you drained. Screening out mutual funds can be a tedious process, especially, when you find out that there are 18,000 mutual funds for you to choose from. The following is a list of five best mutual funds to invest in. The screening process for this list included the cheapest 20% of mutual funds by fund category and an investment of at least $1 million by the management. Moreover, the returns provided by all these mutual funds are above the benchmark set by the fund manager.
American Funds The Growth Fund of America ®
American Funds had more than one mutual fund on the initial screening of mutual funds. The Growth Fund of America ® is at the top of this list as it is a combination of low expenses, depth of management experience, and returns in relation to risk. Any mutual fund with a low risk and a high return will be among the top mutual funds. This mutual fund requires a minimum initial investment of $250 and expenses of 0.66%, which comes to $66 a year per every $10,000 invested. It is not the most aggressively growing mutual fund, but it promises to produce above-average returns from time to time.
Dodge & Cox Stock Fund
The minimum investment for this stock is slightly high but it gets high ratings based on its consistent strong returns, low expenses, and experienced management. The portfolio for this best mutual fund focuses on high-quality as well as large-cap stocks like Bank of America Corp, Wells Fargo & Co, and Charles Schwab Corp. The minimum initial investment amount for this mutual fund is $2,500, while the expenses are set at 0.52%. The fund has a top-notch management team and financial sector learnings which should allow it to do well in the rising interest rate environment.
Fidelity® Total Bond Fund
In terms of bonds, one the best mutual funds for any individual to buy is the fidelity total bond. It makes a part of the best mutual funds list by keeping the expenses low and follows an enhanced index strategy. In simple words, the Fidelity® Total Bond Fund will set a benchmark for the performance but it will not track the progress actively. This minimum initial investment is $2,500 in expenses of 0.45%. The shareholders will be in for an adequate combination of active and passive management that could produce returns higher than the benchmark index.
Vanguard Health Care
Vanguard Health Care is a sector fund, and it is very seldom that a sector fund gets to be a part of the best mutual funds list. This mutual fund makes the list as it has steady returns, low expenses, and low risk as compared to others in the category. As the risk is low, the returns might not be substantially high in the health sector funds. However, the fund has performed well above average in the long run as compared to the peers. This mutual fund has a minimum initial investment amount of $3,000 and expenses of 0.37%. Vanguard Health Care mutual funds are a strong long-term investment option for investors that are looking for exposure in healthcare stocks.
American Funds New Perspective
Investors that are looking for one of the best global stock funds with a high care holding will be attracted to what American Funds New Perspective has to offer. The management at this fund does not see boundaries when it comes to finding the best stocks to hold. They are known to go to any parts of the world to capture the stocks. This flexibility in processing has enabled the company to have above-average returns; more so in the long run. The minimum initial investment is $250, while the expenses are at 0.77%.
