Most investors are familiar with the rise of exchange-traded funds, or ETFs, over the last decade or two. These products are easy to buy and sell during the trading day, and in some cases offer lower fee structures than traditional mutual funds.
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But the following list of the best mutual funds to buy now may prove to skeptics that older investment vehicles still have an important role to play. That’s true whether you’re looking for a tactical way to invest or just seeking a simple index fund with a cost-effective fee structure.
With a lot of changes on the horizon for 2024, including everything from geopolitical risk in the Middle East to evolving interest rate policies at the Federal Reserve, it may be appropriate to review your strategy right now. And if you’re looking to give your portfolio a tune-up and swap in some alternative investments, you might be pleasantly surprised to learn that one of the following mutual funds lines up with your new investing goals:
| 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 |
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
The Vanguard Total Stock Market mutual fund is one of the largest mutual funds on Wall Street. It’s also deceptively simple, doing exactly what it sounds like it should by offering exposure to the totality of the U.S. stock market. There are nearly 4,000 different stocks that make up this product, representing all sectors of the domestic marketplace and all sizes of companies. Of course, not all those investments are represented equally, with about 31% of total assets in the tech sector. The fund is also weighted towards larger companies, so trillion-dollar tech giants Apple Inc. (AAPL) and Microsoft Corp. (MSFT) make up significantly more of the fund’s portfolio than smaller start-ups. But if you want a bit of all that Wall Street has to offer, this mammoth mutual fund is a great place to start — particularly considering its rock-bottom fees that undercut even some of the cheapest ETFs out there.
Vanguard 500 Index Fund Admiral Shares (VFIAX)
Assets: $457 billion Fee structure: 0.04% Minimum investment: $3,000
A bit more focused, this S&P 500 index fund from Vanguard is another runaway leader that’s worth considering. It’s tied only to the S&P 500 index of the 500 largest U.S. stocks — so instead of the totality of the market like the prior fund, you only get the big dogs. Like all Vanguard index funds, it’s incredibly affordable with a low investment minimum and modest annual fees, so for those who simply want to “set it and forget it” by relying on the success of big corporations like tech leader Apple, megabank JPMorgan Chase & Co. (JPM) and drugmaker Eli Lilly & Co. (LLY), this is a logical mutual fund to buy now. It is also biased towards tech, but a bit less so than the prior fund, with about 28% allocated to the sector at present.
American Funds Growth Fund of America (AGTHX)
Assets: $252 billion Fee structure: 0.63% Minimum investment: $250
You might think that only the largest investment firms like Vanguard and Fidelity are able to gather hundreds of billions in assets behind their mutual funds, and only by offering simple index funds. Well, American Funds shows it can stand shoulder-to-shoulder with these names via its flagship growth fund. Unlike index funds that remain very constant in their philosophy and list of holdings, this fund takes a flexible approach to “growth” investing by actively seeking opportunities that its 13 managers think offer the best upside. You’ll pay a bit more in fees and there’s obviously risk to this approach, but with a 10-year average return of about 11.6% there are many investors who are interested in this slightly more aggressive fund. Top holdings at present including Microsoft and Facebook parent Meta Platforms Inc. (META), but interestingly it is actually less reliant on tech than the prior funds with only about 26% of assets in the sector right now.
Fidelity Select Technology Portfolio (FSPTX)
Assets: $13 billion Fee structure: 0.70% Minimum investment: None
If you think all the tactical sector-oriented options are exchange-traded products, this Fidelity fund offers a reminder that you can indeed get highly tactical options in a traditional mutual fund package. As you no doubt could guess, FSPTX is dedicated to tech stocks with a very targeted list of only about 50 picks. The managers are incredibly selective, and offer an active approach to the sector that comes with some additional fees, but seems to resonate with many investors. The fund is incredibly top-heavy though, with 19% of assets in Microsoft and another 15% in Apple. Considering the regular outperformance of these stocks, however, that’s an approach that may be an attractive feature to some tech investors rather than a reason to steer clear. Just make sure you’re OK with focused bets like that going forward if you invest in this Fidelity fund.
JPMorgan Equity Premium Income Fund (JEPAX)
Assets: $6 billion Fee structure: 0.85% Minimum investment: $1,000
Though one of the priciest mutual funds on this list, the big-time yield of JEPAX may make it worth a look for investors trying to access high-yield dividend stocks. The collective payout of this fund’s roughly 115 stocks is good for a tremendous 7.9% yield that puts even the bond markets to shame — and gives you continued exposure to equity markets if you want a portfolio that still throws off a lot of income but allows you to tap into the upside of stocks. It does so through investing in both conventional dividend payers as well as derivatives such as call options that can generate income from stocks without traditional dividends. There’s clearly risk, as these aren’t your typical blue-chip stocks in this portfolio, but it’s an interesting option for yield-hungry investors.
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Vanguard Dividend Appreciation Index Fund (VDADX)
Assets: $14 billion Fee structure: 0.08% Minimum investment: $3,000
If you are interested in traditional income investing strategies and want a bit more stability in your dividend stocks, this Vanguard fund holds about 300 blue-chip stocks that are more aligned with that approach. The portfolio contains large-cap dividend payers like Big Oil titan Exxon Mobil Corp. (XOM), health insurance giant UnitedHeath Group Inc. (UNH), tech leader Microsoft and financial icon JPMorgan Chase, to name a few. These are all rock-solid companies with staying power — and more importantly, a history of raising their dividends over time. That means that while the current yield of about 1.8% for this mutual fund may not get your motor running, the hope of stability and long-term dividend growth may make this one of the best mutual funds to buy now for the buy-and-hold crowd.
Vanguard Total World Stock Index Fund (VTWAX)
Assets: $6 billion Fee structure: 0.10% Minimum investment: $3,000
As the prior funds prove, it’s a great big world of stocks out there. And if you can’t decide between these prior funds and their disparate strategies, this “total world” fund takes out some of the guesswork by offering one of the most diversified approaches out there. Specifically, VTWAX mashes up the entirety of the global stock market so you don’t have to worry about diversification through individual holdings. Instead, you can just buy this Vanguard fund and gain exposure to some 10,000 publicly traded companies in every corner of the world. You’ll still get a healthy dose of domestic leaders, with about 61% of assets in U.S. corporations. You also won’t be too aggressively invested in emerging markets, with regions like Japan, the U.K. and Canada also near the top of the list of regions. But Chinese and Indian stocks do make an appearance, too. If you can’t decide on geography or sector, this may be one of the best mutual funds to buy now that offers you exposure to the whole world of stocks.
PIMCO Income Fund (PONAX)
Assets: $140 billion Fee structure: 0.62% Minimum investment: $1,000
While we’ve talked about a lot of different ways to invest in stocks, it’s important to acknowledge the big shift back into bond markets that has happened after recent changes in central bank policy. Right now, 10-year Treasury bonds yield more than 4.2% compared with less than 2% at the start of 2022. That has prompted many investors to re-allocate some of their money into fixed-income investments that offer generous yields even if bonds may not have the upside growth potential of stocks. A longtime leader in the bond world, PIMCO operates one of the largest fixed-income mutual funds out there via PONAX. Right now, this fund yields about 5.9% and invests mostly in investment-grade bonds. But it also makes tactical investments with a portion of its portfolio in “junk” bonds, emerging market debt and other assets. If you’re interested in playing the totality of the bond market, this well-respected and actively-managed option could be one of the best mutual funds to buy now.
The Hartford Short Duration Fund (HSDIX)
Assets: $2 billion Fee structure: 0.49% Minimum investment: $2,500
If you’re watching bond markets but mostly out of concern for volatility thanks to predictions of changing strategies at the U.S. Federal Reserve, it may pay off to focus on the lowest-risk portion of the bond market — namely, short-dated bonds. Bonds that come due faster naturally carry lower risk, since there are a lot less surprises that can happen in the next year or two versus the next decade or two. After all, it’s unlikely that a top-rated company will collapse in the next several months. This mutual fund from Hartford is actively managed in a way that provides above-average yield for income-oriented investors, with a 3.8% yield at present, but an average duration of just two years. That gives you two times the yield of the S&P 500 with a heck of a lot less downside risk. The portfolio holds roughly 850 bonds for diversification, with rock-solid U.S. Treasury notes as the biggest single flavor of investment, making this one of the best mutual funds to buy now for investors looking for low-risk income.
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9 Best Mutual Funds to Buy Now originally appeared on usnews.com
Update 02/14/24: This story was previously published at an earlier date and has been updated with new information.
