If you're wary of efforts to game the tumultuous market and looking for a haven to park your investments for the long term, mutual funds and exchange-traded funds (ETFs) are a sound solution. These investment vehicles pool together money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other assets. Mutual funds can be actively or passively managed, and they offer investors an easy way to diversify their portfolios and potentially earn a higher return than with individual stocks.
With literally thousands of available mutual funds, how do you find the top ones for your portfolio? Bankrate has highlighted some of the best mutual funds for long-term investment. Our listing of the best mutual funds sticks to U.S. and international equity funds, plus one allocation fund and one short-term bond fund.
An index fund is an investment fund – either a mutual fund or an exchange-traded fund (ETF) – that is based on a preset basket of stocks, bonds, or other assets. Index funds are designed to track a specific market index, such as the S&P 500, and offer investors broad diversification at a low cost. The Vanguard Total Stock Market Index Fund (VTSMX) is one of the best index funds for long-term investment. This fund tracks the performance of the CRSP U.S. Total Market Index, which includes stocks of all sizes from the U.S. equity market.
Looking for the top mutual funds? These are the best U.S. equity stock funds based on their five-year performance:
- T. Rowe Price Blue Chip Growth Fund (TRBCX)
- Fidelity Contrafund (FCNTX)
- Vanguard 500 Index Fund (VFIAX)
- American Funds Growth Fund of America (AGTHX)
- Fidelity Growth Company Fund (FDGRX)
There is never a wrong time to invest in mutual funds for retirement. So, if you're still looking for the best mutual funds, the Zacks Consensus Estimate is a great place to start. Zacks Investment Research tracks the performance of thousands of mutual funds and provides a rating system based on a fund's historical performance, expenses, and other factors.
Investing in mutual funds has been a popular choice among investors for decades, and Fidelity Investments is one of the largest mutual fund companies in the world. Fidelity offers a wide range of mutual funds, including index funds, actively managed funds, and target-date funds. Some of the best Fidelity mutual funds for long-term investment include:
Fidelity Contrafund (FCNTX)
Fidelity Blue Chip Growth Fund (FBGRX)
Fidelity 500 Index Fund (FXAIX)
Fidelity Growth Company Fund (FDGRX)
Fidelity Total Market Index Fund (FSKAX)
Investment selection in your HSA doesn't have to be complicated. Here's what the experts recommend. Investing in mutual funds through your Health Savings Account (HSA) can be a smart way to grow your medical savings over time. The best mutual funds for your HSA will depend on your risk tolerance, investment goals, and time horizon. Some of the top mutual funds for HSA investment include:
Vanguard Health Care Fund (VGHCX)
T. Rowe Price Health Sciences Fund (PRHSX)
Fidelity Select Health Care Portfolio (FSPHX)
Schwab Health Care Fund (SWHFX)
BlackRock Health Sciences Opportunities Portfolio (SHSAX)
This ETF designed to protect against inflation is attracting inflows as price pressures persist. Signs of moderating U.S. inflation haven't deterred investors from betting on an exchange-traded fund that invests in Treasury inflation-protected securities (TIPS). The iShares TIPS Bond ETF (TIP) has attracted more than $6 billion in inflows this year, making it one of the most popular ETFs for investors seeking to hedge against inflation. TIP invests in a basket of Treasury-issued inflation-linked bonds, which pay a fixed interest rate plus a rate that adjusts for inflation.