When I look at mutual funds for long-term investment, I focus on stability, management quality, long-term performance, and how well a fund weathers different market cycles. I don’t just want growth—I want resilience. I also consider costs, diversification, and how a fund fits into a broader portfolio. In this article, I’ll walk you through ten mutual funds I believe are well-suited for long-haul investing. I’ll explain why I chose each, how they work, and what kind of investor they best serve. These picks are tailored for US investors and are based on consistent performance over 10+ years.
Table of Contents
What Makes a Mutual Fund Right for the Long Haul?
Before diving into the list, I want to define what “long haul” means in the investing world. For me, it’s at least ten years. That’s long enough to ride out recessions, bubbles, and interest rate swings. So, I look for funds that show:
- Long-term returns that beat inflation
- Low turnover ratios (which help reduce capital gains taxes)
- Experienced fund managers
- Reasonable fees
- Diversification across sectors or geographies
I also avoid funds that rely heavily on speculation or timing the market.
Here’s how I mathematically define long-term wealth growth. If I invest an amount P at an annualized return r for t years, my future value FV will be:
FV = P(1 + r)^tLet’s say I invest $50,000 in a fund that returns 8% annually for 20 years:
FV = 50000(1 + 0.08)^{20} = 50000(4.66) = 233000That’s more than four times my original investment.
1. Vanguard 500 Index Fund Admiral Shares (VFIAX)
Category: Large-Cap Blend
Expense Ratio: 0.04%
Minimum Investment: $3,000
10-Year Annualized Return: ~12.2%
Turnover Ratio: 3%
This is the gold standard for passive investors. It tracks the S&P 500, so it’s inherently diversified across the largest US companies like Apple, Microsoft, and Johnson & Johnson.
I’ve held VFIAX in my IRA for over a decade. The expense ratio is one of the lowest in the industry, and the tax efficiency is superb. Because it rarely trades, I minimize taxable gains.
Example:
If I invested $25,000 in VFIAX in 2014:
FV = 25000(1 + 0.122)^{10} = 25000(3.16) = 790002. Fidelity ZERO Total Market Index Fund (FZROX)
Category: Total Market
Expense Ratio: 0.00%
Minimum Investment: None
10-Year Return (Modeled): ~11.5%
Turnover Ratio: 4%
This is the best option for those starting out. It includes the full US market—large, mid, small caps. I like that it has no minimum and no expense ratio. It’s ideal for building wealth without fees eating into compounding.
3. T. Rowe Price Blue Chip Growth Fund (TRBCX)
Category: Large-Cap Growth
Expense Ratio: 0.69%
Minimum Investment: $2,500
10-Year Annualized Return: ~13.0%
Turnover Ratio: 29%
TRBCX leans heavily into tech and consumer discretionary. It’s actively managed, but the long-term manager, Larry Puglia, built a reliable record. I use this as a complement to index funds when I want a more aggressive growth tilt.
4. Vanguard Dividend Growth Fund (VDIGX)
Category: Dividend Growth
Expense Ratio: 0.26%
Minimum Investment: $3,000
10-Year Return: ~10.8%
Turnover Ratio: 12%
This fund prioritizes companies that consistently raise their dividends. I like it for retirement accounts, especially if I want to eventually take distributions. It adds income potential without chasing high-yield traps.
5. Dodge & Cox Stock Fund (DODGX)
Category: Large-Cap Value
Expense Ratio: 0.52%
Minimum Investment: $2,500
10-Year Annualized Return: ~10.2%
Turnover Ratio: 12%
DODGX uses a contrarian approach and often buys companies when they’re out of favor. This helps with diversification because it behaves differently from tech-heavy growth funds. I include it to anchor my portfolio when markets get overvalued.
6. Schwab S&P 500 Index Fund (SWPPX)
Category: S&P 500 Index
Expense Ratio: 0.02%
Minimum Investment: None
10-Year Return: ~12.2%
Turnover Ratio: 2%
This is an alternative to VFIAX for those with no minimum investment. I often recommend it for younger investors starting with monthly contributions. The expense ratio is nearly zero, and it mirrors the market well.
Comparison Table: Low-Cost Index Funds
| Fund | Expense Ratio | Minimum Investment | 10-Year Return | Tax Efficiency |
|---|---|---|---|---|
| VFIAX | 0.04% | $3,000 | ~12.2% | High |
| SWPPX | 0.02% | None | ~12.2% | High |
| FZROX | 0.00% | None | ~11.5% | Medium (no ticker tracking index) |
7. American Funds EuroPacific Growth Fund (AEPGX)
Category: International
Expense Ratio: 0.84%
Minimum Investment: $250 (via 529 or workplace plans)
10-Year Return: ~6.8%
Turnover Ratio: 19%
I don’t build a portfolio without some international exposure. AEPGX gives me access to developed and emerging markets outside the US. Over the long haul, I expect global diversification to reduce my total portfolio volatility.
8. Vanguard Total Bond Market Index Fund (VBTLX)
Category: US Bonds
Expense Ratio: 0.05%
Minimum Investment: $3,000
10-Year Return: ~1.6%
Turnover Ratio: 66%
While returns are low, VBTLX provides ballast. During recessions or rate cuts, bonds often rise. I don’t chase returns here. I use this to smooth out risk and preserve capital in downturns.
Example of Diversification Benefit
If my stock fund loses 20% in a bear market but my bond fund gains 5%, a 60/40 mix would result in:
Portfolio\ Loss = (0.6 \times -0.20) + (0.4 \times 0.05) = -0.12 + 0.02 = -0.10So, I only lose 10% instead of 20%.
9. Vanguard Wellesley Income Fund (VWINX)
Category: Conservative Allocation
Expense Ratio: 0.23%
Minimum Investment: $3,000
10-Year Return: ~6.3%
Turnover Ratio: 32%
This fund holds around 60% bonds and 40% dividend-paying stocks. It’s good for older investors or conservative savers. I use it for clients approaching retirement. It won’t shoot the lights out, but it preserves wealth well.
10. Fidelity Contrafund (FCNTX)
Category: Large-Cap Growth
Expense Ratio: 0.81%
Minimum Investment: $0 (if via Fidelity)
10-Year Return: ~13.1%
Turnover Ratio: 28%
Will Danoff has managed this fund for over three decades. It’s one of the few active funds I trust. It owns blue chips like Amazon and Visa but is flexible enough to pivot into smaller names. I use it as an active complement to index holdings.
Illustration Table: Active vs Passive Mutual Fund Options
| Fund | Strategy | Manager Longevity | Flexibility | Cost |
|---|---|---|---|---|
| VFIAX | Passive | N/A | Low | Very Low |
| FCNTX | Active | High (30+ years) | High | Moderate |
| TRBCX | Active | High | Moderate | Moderate |
Building a Long-Term Portfolio with These Funds
When I design a long-term portfolio, I usually combine 4–6 of these funds to get a mix of growth, value, bonds, and international exposure. A typical allocation might look like this for someone in their 30s:
| Fund | Allocation |
|---|---|
| VFIAX | 30% |
| TRBCX | 15% |
| FZROX | 20% |
| AEPGX | 10% |
| VBTLX | 15% |
| FCNTX | 10% |
This gives both core indexing and a growth tilt, with enough diversification to handle different market cycles.
Mathematical Breakdown of Expected Return
Assuming the following annual returns:
- VFIAX: 12.2%
- TRBCX: 13%
- FZROX: 11.5%
- AEPGX: 6.8%
- VBTLX: 1.6%
- FCNTX: 13.1%
The expected portfolio return R_p is:
R_p = (0.30)(0.122) + (0.15)(0.13) + (0.20)(0.115) + (0.10)(0.068) + (0.15)(0.016) + (0.10)(0.131) R_p = 0.0366 + 0.0195 + 0.023 + 0.0068 + 0.0024 + 0.0131 = 0.1014So, I expect an average annual return of about 10.14% over the long haul.
Final Thoughts
I avoid trying to guess the next hot fund. Instead, I build a base of proven performers that span asset classes and regions. These ten funds serve as long-term anchors. I revisit my allocations once a year and rebalance if needed, but I don’t panic when markets drop. That’s how I stay invested for the long run.
