Best mutual funds July 2024
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 4:27 p.m. UTC July 2, 2024
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Mutual funds remain a stalwart option for investors seeking diversification and professional management. These funds pool money collected from many investors to invest in a diversified portfolio of securities, which often includes stocks and bonds.
Good mutual funds will have a transparent and disciplined investment strategy, managed by an experienced and skilled firm.
To help investors find the best mutual funds in 2024, we screened for expense ratios, assets under management, trading volume, level of diversification, portfolio turnover, track record and strategy.
Why trust our investing experts
Experienced fund analysts select our best fund selections based on a screening of several must-have metrics. Some of these metrics include but are not limited to assets under management, expense ratio, strategy, management, minimum investment requirements, turnovers and fees. You can read more about our methodology below.
- 7,000 mutual funds screened.
- 3 levels of fact checking.
- 3-step editorial review.
Streetbeat
Best mutual funds
- Fidelity 500 Index Fund (FXAIX).
- Fidelity Total Market Index Fund (FSKAX).
- Schwab S&P 500 Index Fund (SWPPX).
- Schwab Total Stock Market Index Fund (SWTSX).
- Vanguard 500 Index Fund Admiral Shares (VFIAX).
- Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX).
Fidelity 500 Index Fund (FXAIX)
Fidelity Total Market Index Fund (FSKAX)
Schwab S&P 500 Index Fund (SWPPX)
Schwab Total Stock Market Index Fund (SWTSX)
Vanguard 500 Index Fund Admiral Shares (VFIAX)
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
Compare the best mutual funds
| FUND (TICKER) | EXPENSE RATIO | TOTAL ASSETS | 10-YEAR RETURN AS OF JUNE 30 |
|---|---|---|---|
Fidelity 500 Index Fund (FXAIX)
| 0.015%
| $561.3 billion
| 12.85%
|
Fidelity Total Market Index Fund (FSKAX)
| 0.015%
| $94.9 billion
| 12.09%
|
Schwab S&P 500 Index Fund (SWPPX)
| 0.02%
| $97.5 billion
| 12.80%
|
Schwab Total Stock Market Index Fund (SWTSX)
| 0.03%
| $24.2 billion
| 12.04%
|
Vanguard 500 Index Fund Admiral Shares (VFIAX)
| 0.04%
| $1.1 trillion
| 12.82%
|
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
| 0.04%
| $1.6 trillion
| 12.10%
|
Methodology
Our curated rankings of the best mutual funds were created by screening funds for several must-have metrics:
AUM: All funds on this list have accrued at least $10 billion in AUM, with many sporting much higher AUMs over this minimum.
Expense ratio: To be eligible for this ranking, funds must charge a net expense ratio of 0.04% or less.
Strategy: Each mutual fund on this list is passively managed by tracking an external benchmark index and is not actively managed.
Diversification: Funds on this list have a broad-market focus by targeting stocks from both growth and value styles, from more than one market-cap size and most of the 11 stock market sectors.
Minimum investment: All funds on this list have a minimum investment requirement of $3,000 or less.
Fees: No funds on this list charges sales load, transaction or 12b-1 fees.
Turnover: All funds on this list have a portfolio turnover rate of 4% or less.
Our methodology helped identify mutual funds that charge low fees, have operated for a long time, possess high diversification, incur minimal turnover and offer a passively managed indexing strategy.
Remember that what ultimately constitutes the best mutual fund for an individual investor’s needs will depend on their circumstances, such as risk tolerance, investment objectives and time horizon.
An experienced fund analyst selected the funds above, but they may not be right for your portfolio. Before purchasing any of these funds, do plenty of research to ensure they align with your financial goals and risk tolerance.
Why other funds didn’t make the cut
For this ranking, we began by screening the U.S. mutual fund universe for funds with traits that demonstrate economies of scale and popularity, and have a long track record of performance. As a result, the funds on this list come from three large well-known asset managers: Vanguard, Fidelity and Charles Schwab.
Next, we set a maximum expense ratio limit of 0.04% to ensure that eligible funds were among the most affordable and cost-effective options available to investors.
“Expense ratios directly impact the return to the shareholder, so funds with high expense ratios should be considered carefully,” says Emily Cozad, portfolio manager and research analyst at Buckingham Advisors.
In fact, fees play a large role in determining long-term net investment returns, so keeping these minimal is in an investor’s best interest.
We also eliminated funds that charged sales loads, 12b-1 fees and imposed minimum investment requirements. This allowed us to focus on funds more accessible to a broad range of investors and without the extra hidden costs that eat into returns.
Next, we excluded mutual funds with a narrow focus. For instance, mutual funds focusing only on large-cap, value, dividend, or financial sector stocks did not make the cut. While these funds have their uses, they are too specific for ranking the best overall mutual funds suitable for a wide range of investors.
Finally, we restricted our rankings to passively managed funds that track a benchmark index. By doing so, we excluded actively managed mutual funds.
We arrived at this decision after reviewing the results of the latest SPIVA Scorecard from the S&P Dow Jones Indices, which measures the performance of actively managed funds worldwide against their index benchmarks.
While actively managed funds can target different objectives like income or risk management, the research showed that the majority failed to outperform an index over long periods. For example, SPIVA showed that 93.4% of U.S. large-cap funds underperformed the S&P 500 over the last 15 years, as of Dec. 31, 2022.
Final verdict
For investors looking for automated contributions and simplicity, a well-managed mutual fund offers convenience and built-in diversification.
Our pick for the best overall mutual fund is Fidelity 500 Index Fund (FXAIX). With an expense ratio of just 0.015%, this fund ranks as one of the cheapest in the industry. It’s been around since 1998 and can be purchased on Fidelity’s platform without transaction fees or minimum investment requirements. The index it tracks, the S&P 500, has a strong history of good performance and is regarded as the benchmark to beat for many funds.
Frequently asked questions (FAQs)
By investing in mutual funds, you also get the benefit of professional management, which can be especially useful for people who don’t have the time or expertise to research investments and manage their own portfolios.
But like all investments, mutual funds come with risks. The value of your investment can go up or down depending on the performance of the underlying assets and the broad market. Fees, taxes and expenses also vary by fund and eat into your returns, so keep those in mind when selecting a fund.
The term “safe” is relative when it comes to investing. Unlike a certificate of deposit or a high-yield savings account, mutual funds are not guaranteed or insured by any government agency. The value of a mutual fund investment will fluctuate as the market value of the portfolio securities increases or decreases so that you could lose money, including the principal amount invested.
Generally, the risk level of a mutual fund depends on the underlying assets. For instance, a mutual fund holding stocks may be very volatile, while a money market mutual fund is more stable.
Mutual funds are taxed in many ways. One way is from distributions received from dividends or interest income from the fund’s underlying investments, or from capital gains incurred from sales within the fund itself.
These are taxed at different rates depending on factors such as an investor’s income bracket and whether they qualify as ordinary versus quality dividends or taxable versus tax-exempt interest. Investors in mutual funds can also be taxed on capital gains when they sell shares above the cost basis they purchased at, either at the short-term or long-term capital gains rate. Note that tax rules can be complex and change from year to year, so it’s generally a good idea to consult with a licensed financial advisor.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
