Mutual funds are one of the most popular ways to invest in the stock and bond markets, especially as part of employer-sponsored 401(k) plans and self-directed IRAs. Mutual funds allow you to buy a diversified collection of assets in just one fund, often at low cost. So you’ll be able to create a diversified portfolio quickly, easily and cheaply.
But with literally thousands of available funds, how do you find the top ones for your portfolio? Bankrate has highlighted some of the best mutual funds based on Morningstar research.
Top performing low-fee mutual funds
Bankrate selected its top funds based on the following criteria, and included only funds that were investible for regular investors (i.e., not those with $5 million minimum investments):
- Five-star U.S. stock funds according to Morningstar, for quality
- No sales load (i.e., commission), in order to reduce costs
- 5-year performance better than the Standard & Poor’s 500, which has historically returned about 10 percent annually on average
- An expense ratio less than 0.5 percent, to minimize ongoing costs
- Funds where the manager has been at the helm for more than five years, to ensure stability
Below are some of the best mutual funds, with performance data as of Nov. 30, 2022.
Shelton Nasdaq-100 Index Direct (NASDX)
This fund tries to replicate the performance of the Nasdaq-100 index.
- 2022 YTD performance: -29.3 percent
- Historical performance (annual over 5 years): 13.2 percent
- Expense ratio: 0.50 percent
Voya Russell Large Cap Growth Index Fund (IRLNX)
This index fund tracks the performance of the Russell Top 200 Growth index, which includes large stocks.
- 2022 YTD performance: -27.0 percent
- Historical performance (annual over 5 years): 12.6 percent
- Expense ratio: 0.43 percent
Vanguard Dividend Appreciation Index Admiral Shares (VDADX)
This index fund includes high-quality companies that can increase their dividends over time.
- 2022 YTD performance: -8.6 percent
- Historical performance (annual over 5 years): 11.2 percent
- Expense ratio: 0.08 percent
Schwab Fundamental U.S. Large Company Index Fund (SFLNX)
This fund invests in large publicly traded companies and tracks the total return of the Russell RAFI U.S. Large Company Index.
- 2022 YTD performance: -4.1 percent
- Historical performance (annual over 5 years): 11.1 percent
- Expense ratio: 0.25 percent
Fidelity Large Cap Core Enhanced Index Fund (FLCEX)
This fund invest at least 80 percent of its assets in the S&P 500 using a quantitative approach to find stocks that could outperform.
- 2022 YTD performance: -13.9 percent
- Historical performance (annual over 5 years): 10.8 percent
- Expense ratio: 0.39 percent
