Conventional mutual funds continue to provide engaging and profitable investment options.
Even if ETFs are growing in popularity, straightforward and reasonably priced mutual funds can still give investors a change of pace in their portfolio.
The growth of exchange-traded funds, or ETFs, during the past ten or so years is well known to most investors. These products provide lower fee structures than typical mutual funds and are simple to buy and sell during the trading day.
However, those who doubt the value of older investment vehicles may find that the following list of the top mutual funds to purchase right now disproves their claims. This is valid regardless of your preference for a cost-efficient fee structure or a straightforward index fund with a tactical approach to investing.
It could be appropriate to reassess your approach now, as there are a number of developments that could occur in 2024, ranging from shifting interest rate policy at the Federal Reserve to geopolitical risk in the Middle East. And you may be pleased to find that one of the following mutual funds aligns with your new investing objectives if you’re wanting to rebalance your portfolio and add some alternative investments:
| MUTUAL FUND | ASSETS | FEES | MINIMUM INVESTMENT |
| Vanguard Total Stock Market Index Fund (ticker: VTSAX) | $340 billion | 0.04% | $3,000 |
| Vanguard 500 Index Fund Admiral Shares (VFIAX) | $457 billion | 0.04% | $3,000 |
| American Funds Growth Fund of America (AGTHX) | $252 billion | 0.63% | $250 |
| Fidelity Select Technology Portfolio (FSPTX) | $13 billion | 0.70% | None |
| JPMorgan Equity Premium Income Fund (JEPAX) | $6 billion | 0.85% | $1,000 |
| Vanguard Dividend Appreciation Index Fund (VDADX) | $14 billion | 0.08% | $3,000 |
| Vanguard Total World Stock Index Fund (VTWAX) | $6 billion | 0.10% | $3,000 |
| PIMCO Income Fund (PONAX) | $140 billion | 0.62% | $1,000 |
| The Hartford Short Duration Fund (HSDIX) | $2 billion | 0.49% | $2,500 |
1. Vanguard Total Stock Market Index Fund (VTSAX)
Assets: $340 billion
Fee structure: 0.04% or $4 per year on every $10,000 invested
Minimum investment: $3,000
One of the biggest mutual funds on Wall Street is the Vanguard Total Stock Market fund. It is also surprisingly easy to use, providing exposure to the entirety of the U.S. stock market—exactly what it sounds like it should. This solution consists of around 4,000 different stocks, which cover every industry in the domestic market as well as all business sizes. Naturally, not all of those investments are equally represented; the IT sector holds around 31% of all assets.
Additionally, the fund is biased towards bigger businesses; as a result, a larger portion of the portfolio is made up of trillion-dollar tech giants Apple Inc. (AAPL) and Microsoft Corp. (MSFT) than smaller start-ups. However, this massive mutual fund is a wonderful place to start if you want a taste of everything Wall Street has to offer, especially given its ridiculously low costs, which beat out some of the most affordable ETFs available.
2. Vanguard 500 Index Fund Admiral Shares (VFIAX)
Assets: $457 billion
Fee structure: 0.04%
Minimum investment: $3,000
Another clear winner that’s well worth examining is this Vanguard S&P 500 index fund, which is a little more targeted. As opposed to the entire market as in the previous fund, you only receive the big dogs because it is solely correlated with the S&P 500 index of the 500 largest U.S. stocks.
This is a logical mutual fund to purchase right now for those who want to “set it and forget it” by relying on the success of large corporations like tech leader Apple, megabank JPMorgan Chase & Co. (JPM), and drugmaker Eli Lilly & Co. (LLY). Like all Vanguard index funds, it’s incredibly affordable with a low investment minimum and modest annual fees. Additionally, it favors technology. but a bit less so than the prior fund, with about 28% allocated to the sector at present.
3. American Funds Growth Fund of America (AGTHX)
Assets: $252 billion
Fee structure: 0.63%
Minimum investment: $250
You might believe that the only way the biggest investment companies, like Fidelity and Vanguard, are able to amass hundreds of billions of dollars in assets behind their mutual funds is by providing basic index funds. With its premier growth fund, American Funds, however, demonstrates that it can compete with these household names.
In contrast to index funds, which stick to a highly fixed philosophy and holdings list, this fund actively seeks out opportunities that its 13 managers believe have the greatest upside potential in a “growth” investment strategy. With a 10-year average return of almost 11.6%, this slightly more aggressive fund attracts a lot of interest from investors despite the fact that it will cost you a little more in fees and carries some risk. Currently, its top holdings include Meta Platforms Inc. (META), the parent company of Facebook and Microsoft. Interestingly, though, compared to previous funds, it is less dependent on technology, with only around 26% of its assets currently in the sector.
4. Fidelity Select Technology Portfolio (FSPTX)
Assets: $13 billion
Fee structure: 0.70%
Minimum investment: None
This Fidelity fund serves as a reminder that very tactical options are available in typical mutual fund packages, even if you had assumed that all tactical sector-oriented options were exchange-traded products. As one might expect, FSPTX is devoted to tech stocks and has a very exclusive roster of only roughly fifty selections. The managers exhibit extreme prudence and provide a proactive approach to the industry, albeit at a premium, which appears to appeal to a considerable number of investors.
However, with 19% of assets in Microsoft and another 15% in Apple, the fund is extremely top-heavy. However, given the consistent outperformance of these stocks, some tech investors may find this method intriguing rather than reason to avoid it. Just make sure you’re OK with focused bets like that going forward if you invest in this Fidelity fund.
5. JPMorgan Equity Premium Income Fund (JEPAX)
Assets: $6 billion
Fee structure: 0.85%
Minimum investment: $1,000
Despite being one of the most expensive mutual funds on this list, investors wishing to acquire high-yield dividend stocks might find JEPAX worth a look due to its massive yield. The combined payout of this fund’s about 115 equities is excellent for an amazing 7.9% yield that even the bond markets can’t match.
If you want a portfolio that still generates a lot of income while allowing you to take advantage of stock market gains, you may continue to be exposed to the equity markets. It accomplishes this by making investments in both regular dividend payers and derivatives, like call options, which can produce income from equities without the usual payouts. Since the stocks in this portfolio aren’t your standard blue-chip stocks, there is obviously risk. but it’s an interesting option for yield-hungry investors.
6. Vanguard Dividend Appreciation Index Fund (VDADX)
Assets: $14 billion
Fee structure: 0.08%
Minimum investment: $3,000
This Vanguard fund contains over 300 blue-chip stocks that are more in line with classic income investment strategies if you’re interested in those and want a little more stability in your dividend holdings. Large-cap dividend payers in the portfolio include, among others, industry titans in the oil and gas sector Exxon Mobil Corp. (XOM), UnitedHealth Group Inc. (UNH), Microsoft, a leader in technology, and financial icon JPMorgan Chase.
All of these businesses are pillars of strength with longevity, and perhaps most significantly, they have a track record of increasing dividends over time. That means that even while this mutual fund’s 1.8% present yield might not get your heart racing, the prospect of stability and future dividend increase can make it one of the best mutual funds for buy-and-hold investors to purchase right now.
7. Vanguard Total World Stock Index Fund (VTSAX)
Assets: $6 billion
Fee structure: 0.10%
Minimum investment: $3,000
There is a vast world of equities out there, as the previous funds demonstrate. And this “total world” fund removes some of the uncertainty by providing one of the most diverse ways available, in case you are unable to make a decision between these previous funds and their disparate tactics. To be more precise, VTSAX aggregates the whole world stock market, eliminating the need for you to worry about diversification through individual holdings. Alternatively, you may just purchase this Vanguard fund to have exposure to almost 10,000 globally listed publicly traded companies.
With roughly 61% of assets in US firms, you’ll still get a good dose of domestic leaders. Additionally, you won’t be investing in emerging markets too much; in fact, the top three regions to consider are Japan, the United Kingdom, and Canada. However, there are also goods from China and India. This can be among the greatest mutual funds available right now that gives you exposure to the entire stock market if you’re having trouble deciding between sectors or regions.
8. PIMCO Income Fund (PONAX)
Assets: $140 billion
Fee structure: 0.62%
Minimum investment: $1,000
Even though we have covered a wide range of stock investment strategies, it is crucial to recognise that, following recent adjustments to central bank policy, there has been a significant reversion to bond markets. The yield on 10-year Treasury notes is currently over 4.2%, up from less than 2% at the beginning of 2022. Because of this, a lot of investors have decided to reallocate a portion of their funds to fixed-income investments, which provide high yields despite the fact that bonds do not have the upward growth potential of stocks. PIMCO, a seasoned leader in the bond market, runs PONAX, one of the biggest fixed-income mutual funds available.
Currently, this fund mostly invests in investment-grade bonds and yields 5.9%. However, a portion of its portfolio is allocated to tactical investments in emerging market debt, “junk” bonds, and other assets. Investing in this reputable and actively managed mutual fund may be the finest option right now if you want to take advantage of the entire bond market.
9. The Hartford Short Duration Fund (HSDIX)
Assets: $2 billion
Fee structure: 0.49%
Minimum investment: $2,500
It could be beneficial to concentrate on the lowest-risk segment of the bond market, especially short-dated bonds, if you’re keeping an eye on the bond markets but are mostly worried about volatility due to forecasts of the US Federal Reserve shifting its tactics. Bonds with earlier maturities inherently have lower risk because there are a lot fewer surprises that could occur in the next year or two as opposed to the next decade or two. A well regarded corporation is unlikely to fail in the coming months, after all.
With an average duration of just two years and a current yield of 3.8%, this Hartford mutual fund is actively managed to give income-oriented investors an above-average yield. With significantly less downside risk, you can get twice the yield of the S&P 500. This is one of the greatest mutual funds to purchase right now for investors seeking low-risk income because it contains about 850 bonds in total for diversification, with the largest single investment type being rock-solid U.S. Treasury notes.
Also read this: Diversify and Conquer: Lump Sum Investing in Mutual Funds 2024
Case Study: Sarah’s Journey to Financial Freedom
Although Sarah, a 35-year-old marketing professional, has always loved investing, she felt intimidated by the stock market’s complexity. Looking for a more convenient method to increase her fortune, she resorted to mutual funds.
Sarah was first apprehensive and decided to start small by investing in a diversified equity fund that a financial advisor had suggested. She started investigating and diversifying her portfolio across a range of asset classes, including bonds and foreign funds, as her confidence grew over time.
In the face of economic downturns and market volatility, Sarah stuck to her investing philosophy, emphasizing long-term growth above cyclical swings. She kept careful track of her investments, tweaking as needed but never deviating from her objectives.
After five years, Sarah’s choice to invest in mutual funds has proven to be extremely beneficial. She has not only witnessed remarkable returns on her investments, but she has also hit financial benchmarks that she had previously believed were unattainable. Sarah’s path to financial independence has been nothing short of revolutionary, encompassing everything from buying her ideal home to setting aside money for her kids’ college future.
Sarah has increased her fortune and acquired vital financial knowledge and confidence by investing in mutual funds. She now exhorts people to start their own investing journeys, stressing the value of perseverance, self-control, and remaining loyal to one’s objectives.
Sarah’s experience serves as evidence of the effectiveness of mutual fund investment in generating sustainable financial gains. Mutual funds offer an approachable and efficient way to increase your wealth and safeguard your financial future, regardless of your age, financial objectives, or history.
Also read this: What are Index Funds vs Mutual Funds: Decoding the Investment Conundrum 2024
Comparison Tools: Finding the Right Mutual Fund for You
Selecting the ideal mutual fund can be difficult, especially because there are thousands of possibilities on the market. Fortunately, investors can now compare several mutual funds using internet tools that make the process easier by comparing them based on important parameters including performance, fees, and risk factors. Here are some of the tools:
Morningstar: This esteemed financial research company provides a thorough mutual fund comparison tool. Investors can create a list of funds that fit their needs by entering precise parameters such as fund category, investment style, and performance measures. Investors can make educated judgments by perusing Morningstar’s comprehensive fund profiles, which offer information on a fund’s past performance, costs, risk assessments, and holdings in the portfolio.
Yahoo Finance: Investors can filter funds using a variety of criteria, including fund type, expense ratio, and Morningstar rating, using Yahoo Finance’s user-friendly mutual fund screener. To assist investors in weighing their options and choosing funds that complement their investing goals, the tool also provides performance data, fund comparisons, and comprehensive fund biographies.
Vanguard Fund Comparison Tool: One of the biggest mutual fund companies, Vanguard, provides investors with a fund comparison tool that lets them compare both their own funds and funds from other companies. Investors can find funds that fit their investment goals by examining performance, costs, and portfolio features. Vanguard is a particularly attractive tool for investors who are cost conscious because of its concentration on index funds and low-cost investment.
Join the Conversation: Share Your Mutual Fund Experiences
Mutual fund investing involves more than just math and statistics—it also involves human experience, observation, and knowledge gained from others. Please feel free to use the comments section below to share your personal mutual fund investment experiences, advice, or queries. Your contributions can add significant viewpoints and insights that enhance the conversation and support other investors as they pursue financial success.
Your voice matters, regardless of your level of knowledge—you don’t have to be an expert investor with years of experience to start out. No inquiry is too simple, and no realization is too tiny. We think we can all gain and develop together by encouraging a community of mutual fund investors who freely share their expertise and experiences.
We’re excited to hear from you and build a strong network of mutual fund aficionados that help and educate one another. Together, let’s take this trip to ensure that everyone has a positive and gratifying experience with mutual fund investing.
Stay Informed: Explore Reputable Financial News Websites for Mutual Fund Insights
To stay up to date on mutual funds and wider market movements, visit reliable financial news sources. Staying up to date is ensured by subscribing to newsletters or reading sections specifically for investing in mutual funds. Look through websites such as Bloomberg, CNBC, or Financial Times to find knowledgeable commentary and professional viewpoints. You can make well-informed investing decisions that are in line with your financial objectives and the state of the market by remaining educated.
