The best mutual funds can diversify your investment portfolio while bringing financial gain. A mutual fund isn't risk-free, however. Contributions from all investors are pooled and invested in stocks, bonds, and money market accounts. Because of the nature of these investments, there are no guarantees.
Carefully evaluating your mutual fund choices can help alleviate stress before taking the plunge. The best mutual fund for an individual can vary depending on the initial investment, the level of risk the consumer is willing to bear, and the length of time he or she is willing to invest, which can mean riding out rises and falls in the market. Consult a financial advisor or other professional for advice tailored to your needs.
1. PIMCO Long Duration Total Return Fund (PLRIX) - Long Term Bond
This investment seeks maximum total return. It returned 12.04 percent during 2011, 18.98 during the past three years and 10.73 over the past five years. The fund invests at least 65 percent of its assets. Primary investment funds are allocated to fixed-income debt securities, but may invest up to 10 percent in junk bonds.
2. Thompson Plumb Bond Fund (THOPX) - Short Term Bond
This fund improved investment strategy from 2009 to 2010 by investing in corporate bonds. Returned 2.43 percent over the past year, 14.15 over the past three years and 7.61 over the past five years.
3. T. Rowe Price New Horizons Fund (PRNHX) - Small Growth Fund
This is a reliable fund for investing in small American companies. The fund is in the process of anchoring by investing in an additional group of stable companies that have been long-term performers. Returned 20.37 percent in the past year, 24.82 in the past three years and 6.52 over the past five years.
4. Fidelity Capital and Income Fund (FAGIX) - High Yield Bond
A volatile, no-load, high-yield bond. Returned 1.69 percent over the past year, 22.35 percent over the past three years and 7.93 percent over the past five years.
5. Monetta Young Investor (MYIFX) - Large Growth Fund
This fund performs well due to primary investments in "best of breed" companies, such as Disney, Coca-Cola and Apple. Best of breed companies continue to trade well even when the market is down. Returned 7.34 percent in the past year and 22.04 percent in the past three years.
6. Symons Value Institutional Fund (SAVIX) - Large Value Fund
This fund seeks long-term capital growth by investing in companies that have limited long-term downside risk. Returned 7.24 percent over the past year and 12.24 percent over the past three years.
7. Homestead Small Company Stock Fund (HSCSX) - Small Value Fund
Invests primarily in American consumer firms, such as Nordstrom and J.M. Smucker. Returned 10.91 percent over the past year, 21.23 percent over the past three years and 5.72 percent over the past five years.
8. Prudential Financial Services (PFSAX) - Financial Fund
With a proven ability to outperform in a variety of market conditions, this fund is considered a specialty holding. Returned -11.08 percent in the past year, 23.25 percent in the past three years and 4.05 percent in the past five years.
9. Delaware Pooled Focus Mid Cap Growth Equity Fund (DCGTX)
Invests primarily in common stocks of growth companies. Returned 21.44 percent in the past year, 31.62 percent in the past three years and 10.65 percent in the past five years.
10. Appleseed Fund (APPLX) - Mid-Cap Value
Holds investments in some smaller companies, but is highly diversified among capitalization classes. A unique feature of this fund is its commitment to socially responsible investing, committed to sustainable companies. Returned 4.78 percent in the past year and 19.47 percent over the past three years.
11. PIMCO Global Bond Fund - Unhedged (PIGLX) - World Bond
This fund invests in foreign country firms that have the best moving-forward debt dynamics, such as Germany and Canada. Returned 5.05 percent during the past year, 15.30 percent over the past three years and 8.71 percent over the past five years.
12. MFS Lifetime Retirement Income Fund (MLLAX)
This is the best fund for retirees looking to generate regular income while continuing to save. Returned 4.54 percent during the past year and 11.87 over the past three years.