Top Performing Mutual Funds: April 2021

When we buy mutual funds, we are naturally curious: which ones are performing better today?

While it is a common place to start your search, remember that you are buying morning when looking for the best mutual funds. The best in the short term don’t always turn out to be long-term winners. The best mutual funds for your portfolio won’t necessarily be the best for your parents, your siblings, or your neighbors.

Best Performing US Equity Mutual Funds as of April 2021

To determine the best mutual funds measured by year-to-date returns, we looked at US equity funds open to new investors with low costs (no sales fees and expense rates of 1% or less) and investments. lows of $ 2,500 or less using Morningstar data.

Fund performance (performance to date)

Fund performance (5-year return)

Bridgeway Small Cap Value

Bridgeway Ultra Small Business Market

MassMutual Select Small Company Val I

American Century R6 Small Cap Value

Small Cap Value Advisor AB

Hartford Small Cap Value R5

JPMorgan Small Cap Value R5

Columbia Small Cap Value I Inst2

Data updated as of March 21, 2021.

How to choose the best mutual funds for you

NerdWallet’s recommendation is to invest primarily through mutual funds, especially index funds, which passively track a market index like the S&P 500. The mutual funds mentioned above are actively managed, which means they try to outperform the stock market, a strategy that often fails.

When you’re ready to invest in funds, here’s what to consider:

  • Decide whether to invest in active or passive funds, knowing that both returns and costs often favor passive investing.

  • Understand and analyze fees. A broker that offers mutual funds with no transaction fees can help cut costs.

  • Build and manage your portfolio, monitoring and rebalancing your asset mix once a year.


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NerdWallet Rating
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Average mutual fund returns

Managing your portfolio also means managing your expectations, and different types of mutual funds should bring different expectations of performance.

Stock mutual funds = higher potential returns (or losses)

Stock mutual funds, also known as stock mutual funds, carry the highest potential rewards, but also the highest inherent risks, and different categories of stock mutual funds carry different risks.

For example, the performance of large-cap high-growth funds is typically more volatile than, for example, equity-indexed funds that only seek to match the returns of a benchmark index like the S&P 500, which has grown an average of 6.6% annually over the past 30 years. (Learn more about Stock versus Index Fund Mutual Funds.)

Over the past five years, the average return for equity mutual funds ranged by category from minus-2.23% for Latin American equity funds to 10.53% for large-cap growth stocks, depending on August 28 Morningstar data.

Bond mutual funds = lower returns (but lower risk)

Bond mutual funds, as the name suggests, invest in a range of links and they provide a more stable rate of return than stock funds. As a result, the potential average returns are lower.

Bond investors purchase government and corporate debt for a set repayment period and interest rate. While no one can predict future stock market returns, bonds are considered a safer investment, as governments and companies generally pay off their debt (unless either of them goes bankrupt).

Like equity funds, there is a range of bonds with varying degrees of risk. Over the past five years, the average yield for bond mutual funds ranged by category from minus 0.9% for emerging market local currency bond funds to 6.7% for long-term government bonds, according to Morningstar.

Money market mutual funds = lower returns, lower risk

These are fixed income mutual funds that invest in high-quality short-term debt. They are considered one of the safest investments you can make. Money market funds are used by investors who want to protect their retirement savings but still earn some interest, between 1% and 3% per year. (Learn more about money market funds.)

Focus on what matters

Chasing past performance may be a natural instinct, but it is often the wrong one when betting on your financial future. Mutual funds are the cornerstone of buy-and-hold and other retirement investment strategies. Jumping from stock to stock based on performance is a rearview mirror tactic that rarely leads to big profits. That’s especially true with mutual funds, where each transaction can bring costs that erode long-term earnings.

What is important to consider is the role that any mutual fund you buy will play in your total portfolio. Mutual funds are inherently diversified, investing in a set of companies (rather than buying stocks in just one). That diversity helps spread your risk.

You can build a smart and diversified portfolio with just a few well-chosen mutual funds or exchange-traded funds, in addition to annual controls to adjust your investment mix.

Disclosure: The author did not hold positions in the aforementioned securities at the original time of publication.

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