With investing, as with most things in life, cost matters. Every dollar you pay in fees on your investments is a dollar that isn’t going toward generating returns on your money. Fewer expenses mean higher earning power and more money in your pocket to invest.
One often overlooked fee on some mutual funds is sales loads, or commissions paid to the advisor or broker who sells you the fund. Sales loads can be applied when you buy a fund, called front-end sales loads, or when you sell your shares, called back-end sales loads, and can be as high as 8.5% of your investment.
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To keep costs low when investing in mutual funds, look for “no-load mutual funds,” which won’t have sales charges. However, some funds may have a sales load at certain brokers but not others, so it’s important to look closely before investing.
Note that even no-load mutual funds may still have expense ratios, which represent the amount of invested capital that goes toward running the fund. But these, too, can be minimized with savvy shopping.
What follows are five of the best no-load mutual funds. Morningstar analysts have awarded each their highest rankings of five stars and a gold badge. The badge indicates the team has the highest conviction that these funds will outperform the market or their peers over the near term:
| Fund | Expense Ratio |
| Fidelity 500 Index Fund (ticker: FXAIX) | 0.015% |
| Fidelity Select Semiconductors Portfolio (FSELX) | 0.65% |
| Dodge & Cox Income I (DODIX) | 0.41% |
| T. Rowe Price Capital Appreciation (PRWCX) | 0.71% |
| Vanguard International Core Stock Fund (VWICX) | 0.48% |
Fidelity 500 Index Fund (FXAIX)
Many investors start with an S&P 500 index fund, and the Fidelity 500 Index Fund is a great choice to fill this bucket. You’ll gain exposure to 500 of the largest publicly traded companies in the U.S. This entails fan favorites like Apple Inc. (AAPL), Nvidia Corp. (NVDA) and Microsoft Corp. (MSFT).
What sets FXAIX apart from all the other S&P 500 funds is largely cost, with a rock-bottom expense ratio of 0.015%. For an even cheaper large-cap fund that invests in many of the same companies, you could also consider the Fidelity Zero Large Cap Index Fund (FNILX), which has no expense ratio and gets four stars plus a gold badge from Morningstar.
Fidelity Select Semiconductors Portfolio (FSELX)
For a more targeted approach, the Fidelity Select Semiconductors fund is a great tech sector play. It invests primarily in companies that design, manufacture or sell semiconductors or similar electronic components.
FSELX has an average annual return of nearly 26% over the past 10 years and more than 43.5% in the past year. While past performance is not an indicator of future results, given the importance of semiconductors in modern technology, like laptops and smartphones, it’s unlikely this fund will fall out of favor anytime soon.
[READ: 7 Best Income ETFs to Buy in 2025]
Dodge & Cox Income I (DODIX)
If you want to add fixed income to your portfolio, look no further than the Dodge & Cox Income fund. The fund managers focus on providing high and stable income while preserving investor capital with a secondary objective of capital appreciation.
This actively managed fund offers a diversified portfolio of primarily investment-grade debt. But the managers retain the flexibility to venture into lower rated debt if opportunities arise. Just under 5% of the portfolio is allocated to below investment-grade debt. Nearly half is in securitized debt, with the next largest portion in corporate bonds.
There is a $2,500 investment minimum to get started, but this is reduced to $1,000 if you hold the fund in an individual retirement account. After that, you’ll need to purchase at least $100 in subsequent investments.
T. Rowe Price Capital Appreciation (PRWCX)
The T. Rowe Price Capital Appreciation is a middle-of-the-road fund that offers a more moderate allocation. It invests primarily in common stock to meet its goal of capital appreciation, but may include fixed income and other securities to help preserve investor capital. The result is a fund that falls in the middle of Morningstar’s risk spectrum but on the high end in terms of returns compared to peers.
It currently has about a 60-40 split between stocks and bonds. The stock portion offers a bit of everything, though information technology (19.1%) and health care (15.2%) dominate. The fixed-income portion also covers the gamut with a mix of investment and below-investment grade debt. About one-third of the portfolio is in AA-rated bonds and another third is in B-rated bonds.
You’ll need $2,500 to open an account (or $1,000 in an IRA). But after that you can make subsequent investments with as little as $100.
Vanguard International Core Stock (VWICX)
It would be remiss not to include an international fund on this list of the best no-load mutual funds. Thankfully, Vanguard offers an exceptional one.
VWICX is an actively managed fund, which means it does not simply follow an index’s lead. Instead, the fund’s managers work to create a portfolio of both growth and value stocks in developed and emerging markets outside of the U.S. They’re highly selective in this regard, having created a portfolio of only 91 stocks.
The majority of the portfolio is in Europe (46.3%), followed by emerging markets (24.7%), the Pacific (24.2%) and a wee bit in Canada (4.8%). There are 24 countries represented in all. As an international and emerging markets fund, this one can be more volatile than U.S. funds. But Morningstar considers it below-average risk relative to the foreign large blend category. This is paired with high returns and a low expense ratio. It’s hard to ask for more from a no-load mutual fund — though you will need to meet the $3,000 minimum initial investment to start investing.
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5 Best No-Load Mutual Funds originally appeared on usnews.com
Update 01/10/25: This story was previously published at an earlier date and has been updated with new information.
