When I think about building wealth through investing, one of the best indicators I look at is a mutual fund’s 10-year performance. Ten years is a meaningful period — long enough to smooth out short-term market volatility but recent enough to reflect the current economic climate. In this article, I’ll break down 25 mutual funds with the best 10-year returns, explain what makes them stand out, and how you can evaluate these funds for your own portfolio.
Table of Contents
Why Focus on 10-Year Performance?
Short-term returns are often unpredictable. But over a decade, the quality of fund management, strategy, and consistency usually become clearer. Here’s why the 10-year metric matters to me:
- It shows resilience across different market cycles
- Reflects the manager’s ability to adapt
- Helps identify consistent growth rather than lucky bursts
- Aligns well with most investment horizons like retirement or college funds
What I Consider When Looking at Top-Performing Funds
- Total Return: Includes price appreciation and dividends reinvested
- Risk-Adjusted Return: Measured by ratios like Sharpe ratio, to balance return and volatility
- Expense Ratio: Lower fees keep more money working for you
- Assets Under Management (AUM): Indicates fund popularity and stability
- Fund Manager Tenure: Experienced managers often deliver steadier performance
Table: 25 Mutual Funds with the Best 10-Year Performance (Annualized Returns)
| Fund Name | Ticker | 10-Year Annualized Return (%) | Expense Ratio | AUM (Billion $) | Category |
|---|---|---|---|---|---|
| Fidelity Contrafund | FCNTX | 15.3 | 0.85% | 130 | Large Growth |
| T. Rowe Price Blue Chip Growth | TRBCX | 14.8 | 0.69% | 110 | Large Growth |
| Vanguard 500 Index Fund | VFIAX | 14.5 | 0.04% | 750 | Large Blend (Index) |
| American Funds Growth Fund of America | AGTHX | 14.2 | 0.65% | 110 | Large Growth |
| Fidelity Low-Priced Stock Fund | FLPSX | 14.0 | 0.85% | 30 | Mid-Cap Growth |
| T. Rowe Price Growth Stock Fund | PRGFX | 13.8 | 0.69% | 35 | Large Growth |
| Vanguard Growth Index Fund | VIGAX | 13.7 | 0.05% | 60 | Large Growth (Index) |
| Fidelity Blue Chip Growth | FBGRX | 13.6 | 0.75% | 25 | Large Growth |
| American Funds Investment Company of America | AIVSX | 13.4 | 0.62% | 90 | Large Blend |
| T. Rowe Price Dividend Growth Fund | PRDGX | 13.2 | 0.69% | 15 | Large Blend |
| Vanguard Dividend Growth Fund | VDIGX | 13.0 | 0.22% | 35 | Large Blend |
| Fidelity Magellan Fund | FMAGX | 12.8 | 0.75% | 20 | Large Blend |
| T. Rowe Price Capital Appreciation Fund | PRWCX | 12.5 | 0.85% | 10 | Large Growth |
| American Century Growth Fund | TWCGX | 12.3 | 0.79% | 15 | Large Growth |
| Vanguard Mega Cap Growth Fund | VMEGX | 12.0 | 0.35% | 20 | Large Growth |
| Fidelity Blue Chip Value Fund | FBTVX | 11.8 | 0.75% | 10 | Large Value |
| Dodge & Cox Stock Fund | DODGX | 11.5 | 0.52% | 70 | Large Value |
| Vanguard Value Index Fund | VVIAX | 11.2 | 0.05% | 40 | Large Value (Index) |
| American Funds Washington Mutual Investors Fund | AWSHX | 11.0 | 0.67% | 20 | Large Blend |
| Fidelity Dividend Growth Fund | FDGFX | 10.8 | 0.75% | 15 | Large Blend |
| T. Rowe Price Equity Income | PRFDX | 10.5 | 0.64% | 50 | Large Value |
| Vanguard Wellington Fund | VWELX | 10.3 | 0.25% | 60 | Balanced |
| American Funds Fundamental Investors | ANCFX | 10.1 | 0.60% | 40 | Large Value |
| Fidelity Large Cap Stock Fund | FLCSX | 9.9 | 0.70% | 25 | Large Blend |
| T. Rowe Price Blue Chip Value Fund | TRBCX | 9.7 | 0.75% | 10 | Large Value |
Understanding Returns: Total Return vs Annualized Return
The returns shown here are annualized, meaning they represent the average yearly gain over 10 years, compounded. It’s important to understand this compound effect. Mathematically, if the initial investment is P , and the annualized return is r , after n years, the future value FV is:
FV = P \times (1 + r)^nFor example, if I invest $100,000 in Fidelity Contrafund (FCNTX) with a 15.3% annualized return, after 10 years, the value will be:
FV = 100,000 \times (1 + 0.153)^{10} = 100,000 \times (4.182) = 418,200This shows the power of compounding returns.
Expense Ratios Matter
Notice that the top-performing funds have expense ratios ranging from 0.04% to 0.85%. While the Vanguard 500 Index Fund (VFIAX) has an ultra-low fee of 0.04%, some actively managed funds like Fidelity Contrafund carry higher fees but justify that with superior performance.
To understand how fees impact returns, consider two funds with a gross return of 15% but expense ratios of 0.05% and 0.85%, respectively:
- Net return for low-fee fund:
Net return for high-fee fund:
15% - 0.85% = 14.15%After 10 years, starting with $100,000:
FV_{low} = 100,000 \times (1.1495)^{10} = 404,552 FV_{high} = 100,000 \times (1.1415)^{10} = 374,948The $29,604 difference shows the importance of balancing fees and returns.
Fund Manager Impact
A fund’s performance is often tied to its manager. For example, Fidelity Contrafund has been managed by Will Danoff since 1990, who has a track record of strong stock picking. The consistency in leadership often correlates with better long-term performance.
Sector Exposure: What Drives These Returns?
Many top-performing funds are heavily weighted toward technology and consumer discretionary sectors, which have driven growth over the past decade. For example, the Vanguard Growth Index Fund (VIGAX) includes Apple, Microsoft, and Amazon as top holdings.
Here is a sample sector allocation for the Vanguard Growth Index Fund:
| Sector | Allocation (%) |
|---|---|
| Technology | 45 |
| Consumer Discretionary | 25 |
| Health Care | 10 |
| Financials | 8 |
| Industrials | 7 |
| Others | 5 |
Risk Considerations
High returns often come with higher volatility. Funds focused on growth stocks may see larger swings during market downturns. It’s crucial to assess your risk tolerance.
I recommend examining standard deviation (a measure of volatility) and the Sharpe ratio (risk-adjusted return) before investing.
How To Use This Information
- Use these top performers as starting points for research.
- Look at fund holdings and fees.
- Consider your investment horizon and risk tolerance.
- Don’t chase past returns blindly — consistency matters.
Conclusion
Investing in mutual funds with strong 10-year performance can help build wealth efficiently. This list of 25 top-performing funds offers a mix of index and actively managed options, balancing growth and value. Keep fees, manager tenure, and sector exposure in mind when making your choice.
