Top 10 Mutual Funds

You buy a no-load mutual fund to avoid expenses.  Mutual funds can have a flat commission fee, a front-load fee, or back-load fee.  Sometimes certain mutual fund managers may merit these fees, but in general, they are excessive expenses that you can avoid.  If you pick a no-load mutual fund with a low expense ratio, then you are getting a diversified portfolio at a relatively inexpensive price.

Criteria for a top no-load mutual fund:

1) Low expense ratio – don’t pay excessive fees to mutual fund managers.  As a rule of thumb, try to avoid any mutual fund with an expense ratio over 1%.

2) Good management – experienced investors who know how take appropriate amounts of risk are the ones who will give you the best returns over time.  Too much or too little risk will have adverse effects on your portfolio.

The following mutual funds are my Top 10 recommendations, but they are not ranked 1 through 10.  Keep your own investment goals in mind when researching any of these mutual funds.

Schwab Core Equity (SWANX) – a large-cap blend of American equities with an expense ratio of 0.75%

Fidelity Contrafund (FCNTX) – predominantly U.S. stocks, this fund invests in growth and value and has a 5-star Morningstar rating with a 0.95% expense ratio.

Dodge & Cox (DODGX) – medium to large value companies are the core asset of this fund that has longterm investment in mind.  Expense ratio is 0.52%.

PRIMECAP Odyssey Growth (POGRX) – medium to large growth companies comprise this fund with an expense ratio of 0.73%.

Artio International Equity (JETAX) – 80% international equities are the prime component of this fund that maintains at least 35% of it’s assets in emerging-market securities.

Marisco Global (MGLBX) – combining U.S. equities with at least 40% international equities, Marisco Global invests in large growth companies.

Dodge & Cox Income (DODIX) – a bond fund that invests in government bonds, asset-backed securities, corporate bonds, and collateralized mortgage obligations among others, this fund with an expense ratio of 0.43% is for long-term fixed income.

Vanguard Inflation Protected Securities (VIPSX) – if inflation is a major concern, this fund hedges against it by investing inflation-indexed securities with a dirt cheap 0.25% expense ratio.

Fidelity Intermediate Municipal Income (FLTMX) – by investing predominantly in municipal bonds that are tax exempt, this fund allows a high level of current income with fewer tax consequences.

T. Rowe Price Small-Cap (PRSVX) – investing at least 80% of assets in small-cap equities, this fund seeks to find value in companies that are quickly growing or trading at great values.

Don’t forget another alternative to Mutual Funds are Index Funds which can track markets, industries, or sectors.  They may have even lower expenses and can also provide the diversification that your portfolio may need.

Disclosure: My retirement is currently comprised of a Vanguard S&P 500 Index (VFINX) and a Vanguard Emerging Markets Index (VEIEX).  I own none of the mutual funds mentioned in this article.