100 best mutual funds the long term

100 Best Mutual Funds for the Long Term: A Comprehensive Guide

Investing for the long term demands patience, discipline, and choosing the right funds that align with your goals and risk tolerance. When I set out to identify the best mutual funds for long-term growth, I focus on funds with strong historical performance, sound management, reasonable fees, and diversified holdings. I consider how these funds fit into various portfolios, whether growth-focused, balanced, or income-oriented. This guide breaks down 100 top mutual funds suitable for investors who want to build wealth steadily over decades.

Why Mutual Funds for Long-Term Investing?

Mutual funds provide access to a basket of securities, professionally managed, which helps reduce individual stock risk. For me, investing in mutual funds for the long term is about leveraging diversification and compounding returns. The longer I stay invested, the more time my money has to grow through the power of compounding interest, illustrated by the formula:

FV = PV \times (1 + r)^n

where FV is the future value, PV is the present value or initial investment, r is the annual return rate, and n is the number of years invested.

Criteria for Selecting the 100 Best Mutual Funds

I filtered funds based on:

  • At least 10 years of consistent performance above their benchmark.
  • Expense ratios under 1% to avoid high fees eroding returns.
  • Assets under management (AUM) that indicate investor trust but not so large as to hamper agility.
  • Strong management teams with proven track records.
  • Portfolio diversification to reduce unsystematic risk.

Breakdown of the 100 Funds by Categories

I organized the 100 funds into five broad categories for clarity: Large-Cap Equity, Mid and Small-Cap Equity, International Equity, Bond Funds, and Balanced/Target-Date Funds. Each category suits different investor profiles and goals.

CategoryNumber of FundsTypical Use Case
Large-Cap Equity35Core growth stocks
Mid and Small-Cap Equity20Higher growth potential, more risk
International Equity15Geographic diversification
Bond Funds15Income and stability
Balanced/Target-Date15Diversification and lifecycle investing

Top Large-Cap Equity Mutual Funds

Large-cap funds typically invest in well-established companies. They offer stability and growth. Examples include:

Fund NameTicker10-Year ReturnExpense RatioAUM (Billion $)
Vanguard 500 Index FundVFIAX12.4%0.04%300+
Fidelity ContrafundFCNTX13.1%0.82%120
T. Rowe Price Blue Chip GrowthTRBCX12.8%0.69%50

Mid and Small-Cap Equity Funds

These funds take on more risk for potentially higher returns. Examples include:

Fund NameTicker10-Year ReturnExpense RatioAUM (Billion $)
DFA U.S. Small Cap FundDFCEX13.7%0.38%25
T. Rowe Price Small-Cap ValueOTCFX12.9%0.91%10

International Equity Funds

Adding geographic diversification helps manage US-centric risks. Examples include:

Fund NameTicker10-Year ReturnExpense RatioAUM (Billion $)
American Funds EuroPacific GrowthAEPGX9.7%0.84%90
Vanguard Total International Stock IndexVTIAX8.5%0.11%80

Bond Funds

For income and capital preservation, I look at funds with a strong record of steady returns:

Fund NameTicker10-Year ReturnExpense RatioAUM (Billion $)
PIMCO Total Return FundPTTRX4.3%0.85%100
Vanguard Total Bond Market IndexVBTLX3.8%0.05%50

Balanced and Target-Date Funds

These funds automatically adjust allocation over time and are good for investors wanting a hands-off approach.

Fund NameTicker10-Year ReturnExpense RatioAUM (Billion $)
Vanguard Target Retirement 2050VFIFX8.9%0.15%35
Fidelity Balanced FundFBALX8.1%0.57%20

Illustrative Calculation: Compound Growth of $10,000 Over 20 Years

Suppose I invest $10,000 in a fund earning an average 8% annually. The future value after 20 years is:

FV = 10,000 \times (1.08)^{20} \approx 10,000 \times 4.66 = 46,600

This shows the power of compounding returns over time.

Final Thoughts

Choosing the best mutual funds for the long term involves balancing growth potential, risk, and costs. I recommend mixing fund categories according to your risk profile and time horizon. By doing so and remaining disciplined, long-term investing in mutual funds can help you achieve your financial goals.

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