Retirement investors face a challenging conundrum when choosing the best 401(k) funds: how to discern the value for the fees you pay. High fees can only be rationalized if a fund has consistently demonstrated an ability to outperform its benchmarks over the long haul.
[Sign up for stock news with our Invested newsletter.]
This brings us to a central debate in the investing world: the battle between active and passive investment strategies. While active managers aim to harness their expertise to outperform market benchmarks like the S&P 500, their passive counterparts take a simple approach — tracking the performance of indexes such as the S&P 500 or Nasdaq composite. If you can’t beat them, join them.
Passive funds charge very low fees, whereas many active funds have expense ratios that surpass the 1% mark. And the sobering reality is that only about 15% of U.S. large-cap funds outperform the S&P 500 over a decade, according to S&P Dow Jones.
While passive funds are a good fit for many investors, a few niche active managers validate their fees by consistently delivering superior performance. This list features nine such funds. Just remember that past performance is no guarantee of future returns. Meanwhile, expense ratios are about as reliable as death and taxes.
Note that mutual funds come in different share classes. When you invest outside of your 401(k) plan, you use the investor share class, whereas within your 401(k) plan, you’ll have access to the retirement share class. The retirement classes come with different ticker symbols and often lower expense ratios, but will have the same portfolio.
| 401(k) Fund | Expense ratio | 10-year Average Return |
| Putnam Global Technology Class R (ticker: PGTRX) | 1.32% | 19.8% |
| Columbia Seligman Global Technology Class R (SGTRX) | 1.52% | 19.7% |
| BlackRock Technology Opportunities Class R (BGSRX) | 1.42% | 19.4% |
| Columbia Seligman Technology & Information Class R (SCIRX) | 1.43% | 19.4% |
| Fidelity Growth Company Class K (FGCKX) | 0.45% | 19.1% |
| Fidelity Blue Chip Growth Class K (FBGKX) | 0.4% | 18.2% |
| MFS Technology Class R6 (MTCLX) | 0.79% | 18% |
| JPMorgan Large Cap Growth Class R6 (JLGMX) | 0.44% | 17.9% |
| Fidelity OTC Class K (FOCKX) | 0.66% | 17.8% |
Putnam Global Technology Class R (PGTRX)
Net expense ratio: 1.32% 10-year average return: 19.8%
Topping the list of the best-performing 401(k) funds is a fund that also happens to be ranked the No. 9 technology fund by U.S. News & World Report. Morningstar gives it four out of five stars, but the analysts are less keen on its future. The analysts give it a negative medalist rating due to “weakness” in its people and process ratings. Matters are not aided by its “lofty” fee of 1.32%.
The goal for PGTRX is to provide capital appreciation (aka growth) for investors by investing in emerging and established companies that the managers believe will benefit from “changes, innovations and disruptions.” It scours the globe for 25 to 35 high-conviction names to make a concentrated portfolio, which has paid off so far, but may not continue to do so if Morningstar analysts are correct.
Columbia Seligman Global Tech Class R (SGTRX)
Net expense ratio: 1.52% 10-year average return: 19.7%
The entire tech industry has been on a tear, as evidenced by the second best-performing 401(k) fund on this list: SGTRX. The fund comes in right behind PGTRX in both returns and its ranking by U.S. News & World Report, which considers it the No. 10 best technology fund.
SGTRX also gets four stars and a bronze badge from Morningstar. The bronze badge indicates the analysts are confident it will outperform over a market cycle — just not as confident as they are with silver or gold medal funds.
Like the previous fund on this list, SGTRX is a high-conviction fund that invests in technology or tech-related companies from around the world. It uses fundamental analysis to pick “undervalued and misunderstood companies.” As of publication, Broadcom Inc. (AVGO), Nvidia Corp. (NVDA) and Lam Research Corp. (LRCX) top the list.
BlackRock Technology Opportunities Class R (BGSRX)
Net expense ratio: 1.42% 10-year average return: 19.4%
Despite having technology in the name, the BlackRock Technology Opportunities fund invests in more than in tech companies. Before you get too excited, it’s still predominantly a tech fund with more than three-quarters of its assets in tech. However, what the managers actually do is look for companies that either use or benefit from advances in science and/or technology.
This means you’ll also find communication services, consumer cyclical, financial services, industrial and a few utilities companies in its 70-stock portfolio. That said, the top 10 are mostly tech companies, with Nvidia, Microsoft Corp. (MSFT) and Apple Inc. (AAPL) topping the list.
Morningstar is more optimistic about BGSRX’s future than the previous funds. The analysts give it four stars and a silver badge.
Columbia Seligman Technology & Information Class R (SCIRX)
Net expense ratio: 1.43% 10-year average return: 19.4%
Coming in as the fourth best-performing 401(k) of the past decade is the No. 5 best technology fund, according to U.S. News. It also gets four stars and a silver badge from Morningstar, so if you’re willing to pay the hefty fees, this could be a good pick for you.
It’s another fairly high-conviction fund, with a portfolio of 50 to 75 technology or tech-related companies. Like the other Columbia Seligman fund listed, it looks for “undervalued and misunderstood companies.” The portfolio also looks similar, with the same top 10 names in both funds, albeit in slightly different allocations. In fact, you can find nearly all of the same names in both funds, with a few deviations.
[Read: 5 Rising Stocks in 2025]
Fidelity Growth Company Class K (FGCKX)
Net expense ratio: 0.45% 10-year average return: 19.1%
Here at last: a top-performing 401(k) fund that isn’t a strictly tech fund — in theory. Nearly half the fund is still in the information technology sector, but this is paired with a healthy dose of several other sectors. You’ll get exposure to 10 of the 11 market sectors through its nearly 600-stock portfolio.
The managers buy companies they believe have above-average growth potential. They determine this by evaluating each stock’s financial, economic and market conditions, as well as its industry position.
FGCKX is also the first fund on this list to be awarded five out of five stars from Morningstar, alongside a silver badge. What’s more, it has one of the lowest expense ratios on this list.
Fidelity Blue Chip Growth Class K (FBGKX)
Net expense ratio: 0.4% 10-year average return: 18.2%
Fidelity does it again with another top-performing large-cap fund. The distinction between this and the previous fund is that FBGKX focuses on blue-chip companies. These are firms that are “well known, well established and well capitalized,” according to Fidelity.
If this sounds like Nvidia, Apple and Amazon.com Inc. (AMZN), you’re right. These three industry titans top the over 400-stock portfolio. As a result, you’re looking at a portfolio that’s nearly 42% information technology companies. But all 11 stock market sectors are represented here, albeit to a very small degree for some.
Morningstar also gives FBGKX five stars and a silver badge. Plus, it comes with the lowest expense ratio of the list at 0.4%. This makes it a bargain for an actively managed fund.
MFS Technology Class R6 (MTCLX)
Net expense ratio: 0.79% 10-year average return: 18%
The primary objective for this fund is capital appreciation. It pursues this by seeking out tech companies from across the globe that offer one of three key characteristics: high quality durable growth; emerging growth; or positive change.
The portfolio contains 56 holdings with many familiar names. Meta Platforms Inc. (META) tops the list, followed by Google’s parent company, Alphabet Inc. Class A (GOOGL) and Microsoft. While it is theoretically a global tech fund, nearly 91% of the portfolio features American names. Morningstar gives it four stars and a bronze badge.
JPMorgan Large Cap Growth Class R6 (JLGMX)
Net expense ratio: 0.44% 10-year average return: 17.9%
Another front-runner in the large-growth category is the JPMorgan Large Cap Growth fund. It aims to “harness the return potential of America’s fastest-growing companies.” This is accomplished by targeting stocks from large companies with sustainable competitive advantages and strong price momentum.
Its 75-stock portfolio looks much like others on this list. Top names include Amazon, Microsoft and Meta. Perhaps what sets JLGMX apart the most is that less than one-third of the portfolio is in information technology. This leaves more room for consumer discretionary (18.5%), communication services (16.5%) and financial companies (10.4%). The only sectors not represented are real estate and utilities. Morningstar awards it five stars and a silver badge.
Fidelity OTC Class K (FOCKX)
Net expense ratio: 0.66% 10-year average return: 17.8%
Rounding out this list of the best-performing 401(k) funds is another five-star and silver badge fund, according to Morningstar.
The Fidelity OTC fund invests primarily in stocks that trade on the Nasdaq stock exchange or over-the-counter markets. This means you may find more medium or small companies here than in other portfolios. However, the fund still sits squarely in the large-cap growth style box.
Since the Nasdaq is a tech-heavy exchange, this fund slants toward the information technology sector at over 47% of the portfolio. Top names are the same ones you’ve already seen in this article, including Apple, Nvidia and Amazon.com. But you’ll also find a few less common names in the top 10, such as Marvell Technology Inc. (MRVL) and Taiwan Semiconductor Manufacturing Co. Ltd. (TSM).
More from U.S. News
7 Best Investments During a Recession
5 of the Best Companies to Invest In for 2025
7 High-Yield Covered Call ETFs Income Investors Will Love
9 of the Best Performing 401(k) Funds of the Past Decade originally appeared on usnews.com
Update 02/27/25: This story was previously published at an earlier date and has been updated with new information.
