Best Mutual Funds 2010
The Best Mutual Funds 2010 will be determined at the end of the year. What needs to be evaluated is which ones have the best prospects of having the greatest returns and which one will be consistent.
The stocks and the funds that have shown the best performances since emerging from the bear market are the large growth large cap sector. This is what a great deal of the professional investment consolers are suggesting, but the mid and small cap and emerging market funds are prime for steady performance as well. By always following the trend with that of the majority of the investors, your rise and fall is predictable. The greater the risks, the better chance of having your portfolio performance exceed your expectations. While Vanguard and Fidelity have the largest selection of funds, they are not the only good investment firms available today.
There is a mid-cap fund that has shown good performance and has been consistent for a number of years now. This is the Westport Fund WPFRX. This fund has had a solid performance for the past decade with a return of 6.82% and outperformed the S&P by 7.34% in that same time period. This might not seem like much but the last year’s return was 40.50%. This fund has been rated by Morningstar as a low risk with high returns and has received a 5 rating for most of its existence. The expense ratio is relatively high at 1.37% and the minimum investment is only $2500.
The Fairholme Fund FAIRX is another often overlooked mutual fund that has had a decade of solid performance of 14.35% return and outperformed the S&P 500 by 14.87%. With this performance along with an annualized return last year of 58.85%, Morning star still has this fund as a high risk and high return performer. This is a large cap value blend fund that has earned a 5 star rating from Morningstar in its entire existence. An expense ratio of 1.01% and a minimum investment of $10,000 might be part of the reason it is not a part of many investors portfolios, but it should be.
Another mutual fund that does not receive much fan fare is the AIM Mid Cap Core Equity Fund. This fund has had a 10 year performance of 6.04% and outperformed the S&P 500 by 6.55% over that same period. This fund is just short of being a large cap fund and near the line of blend and growth with a low risk level but return is above average. For almost its entire existence, it has received a 5 star rating from Morningstar. The expense ratio is higher than most at 1.25% but the minimum investment is $1000.
You could follow the trend of making a large part of your portfolio with the favorite large cap large growth funds like the Prime Odyssey Growth Fund. This fund attempts to match returns of the Vanguard Prime Cap Core Fund, which is closed to investors. This fund has had a return of 5.04% over the past 5 years and outperformed the S&P 500 by 4.71% in that same time frame. This fund is considered an average risk with above average returns and an overall rating of 5 stars from Morningstar. The expense ratio of this fund is at a low 0.71% and it only takes a $2000 minimum investment to join.
Mark Hulbert of the Hulbert Financial Digest has a few words about Morningstar and its ratings and the lists they produce, “Morningstar has a lot of smart people who are trying their best, and who are smart statisticians”. He went on to further his thoughts about any top list of funds with “What they are revealing with these lists is just how difficult it is for any of us to identify top performers, even among funds with absolutely fabulous track records, picking next year’s winners is tough”.
Do not use any one list you find as a blueprint for your portfolio. Large cap and growth funds is a great base, but they should not be 100%. Remember today’s small company many be tomorrow’s giant like what Microsoft and Google did.
Some investment counselors think the Best Mutual Funds 2010 lists are just a gimmick. In truth, they are a well thought out suggestion to assist investors in making a very complex decision. From all the mutual funds that are available, everyone knows this is a difficult task that no one gets perfectly right.