Best Mutual Funds To Invest In Now: 12 Top Performers

Mutual funds help you build a diverse portfolio and eliminate the need to research stocks and other assets individually. Although they’re generally a safer investment than individual assets, choosing the right mutual funds can be a daunting process, as the options range from incredibly mild to extremely risky. GOBankingRates has compiled some of the best funds of 2022 to help you take the guesswork out of choosing which funds are best for you.

How We Chose the Funds

To identify the best mutual funds for 2022, GOBankingRates looked at a number of factors, including:

• Year-to-date and long-term performance

• Years since fund creation

• Tenure of fund managers

• Morningstar rating of 5

• Brokerage fees

• Expense ratio

Also considered were comparative risk and income for different types of mutual funds. Here are 12 of the best for 2022.

Best Stock Mutual Funds for Low Expense Ratio

The expense ratio is the percentage of a fund’s assets that go to operating expenses. A lower number is better because it means more assets are invested.

Fidelity Select Health Care Services Portfolio

This high-performing fund invests at least 80% of its assets in companies that own or manage facilities that deliver healthcare services, such as hospitals and nursing homes. Stocks make up most of the investments, giving the fund a higher-than-average risk profile.

• Year-to-date performance: -4.60%

• 5-year performance: 15.85%

• 10-year performance: 15.18%

• Expense ratio: 0.71%

Thrivent Small Cap Stock Fund Class S

Thrivent’s Small Cap Stock Fund invests mostly in small companies, which it defines as those with market capitalizations that are the equivalent of companies on indices such as the Russell 2000 Index and S&P SmallCap 600 Index. This fund has higher-than-average risk but offers high returns.

• Year-to-date performance: -10.61%

• 5-year performance: 12.84%

• 10-year performance: 13.21%

• Expense ratio: 0.80%

Putnam Large Cap Value Fund Class A

This fund from Putnam focuses on value stocks with the potential for capital growth, income or both. Most of the fund’s investments are U.S. common stocks. Major holdings include Microsoft, Bank of America Corp. and Walmart.

• Year-to-date performance: -4.68%

• 5-year performance: 11.71%

• 10-year performance: 12.30%

• Expense ratio: 0.88%

Best Asset Allocation Funds

An asset allocation fund invests in a variety of different types of assets to increase diversity.

Janus Henderson Balanced Fund Class T

This fund prioritizes long-term capital growth while preserving capital and is balanced by current income. It generally invests 35% to 65% in equity securities and the rest in fixed-income securities. The fund has an average risk rating and higher-than-average returns.

• Year-to-date performance: -14.71%

• 5-year performance: 9.79%

• 10-year performance: 9.09%

• Expense ratio: 0.82%

BlackRock Balanced Capital Fund Investor A Shares

The BlackRock Balanced Capital Fund invests in a combination of assets, including stocks, fixed-income securities and derivatives. Although the allocation changes, fund advisors typically keep 25% in senior fixed-income securities such as U.S. government and corporate bonds. The fund has higher-than-average returns and lower-than-average risk.

• Year-to-date performance: -13.51%

• 5-year performance: 8.47%

• 10-year performance: 9.08%

• Expense ratio: 0.76%

Fidelity Multi-Asset Income Fund

The Fidelity Multi-Asset Income Fund invests in equities, investment-grade and non-investment-grade bonds, cash and other assets, with 50% to 70% of its assets in equities and the remainder in debt securities, including non-investment-grade bonds. It has a lower-than-average risk profile and high returns.

• Year-to-date performance: -11.99%

• 5-year performance: 9.22%

• 10-year performance: N/A

• Expense ratio: 0.78%

Best Bond Mutual Funds

Bond funds diversify your portfolio while providing you with a regular source of income. Although returns are generally lower than you’ll find with stock funds, many bond funds — especially those that invest in investment-grade bonds — are also less risky.

Calvert Core Bond Fund Class A

This fund typically invests at least 80% of its net assets in investment-grade, U.S. dollar-denominated debt securities. Up to 5% of assets may be invested in junk bonds. Despite that, this is a lower-risk fund with high returns.

• Year-to-date performance: -9.76%

• 5-year performance: 4.15%

• 10-year performance: 4.40%

• Expense ratio: 0.74%

Eaton Vance High Income Opportunities Fund Class A

The Eaton Vance High Income Opportunities Fund is a high-yield bond fund with average risk and higher-than-average returns. The fund’s primary objective is to provide high current income. Capital growth is secondary.

• Year-to-date performance: -7.37%

• 5-year performance: 3.75%

• 10-year performance: 5.31%

• Expense ratio: 0.90%

Guggenheim Core Bond Fund Class P

The Guggenheim Core Bond Fund invests mostly in investment-grade fixed-income securities, which may include closed-end funds and exchange-traded funds. It’s a lower-risk fund with a long track record of solid returns and low fees.

• Year-to-date performance: -11.96%

• 5-year performance: 1.42%

• 10-year performance: 3.36%

• Expense ratio: 0.79%

Most Established Funds With Long Track Records of High Returns

Each of the winning funds in this category has been around for at least 10 years and produced solid returns. None has an expense ratio higher than 1%.

Fidelity OTC Portfolio

This is a large growth fund that invests at least 80% of its assets in growth and value securities traded on Nasdaq or over the counter, which offers exposure to small- and medium-cap stocks. Over 25% is typically invested in the tech sector.

• Year-to-date performance: -26.99%

• 5-year performance: 17.84%

• 10-year performance: 17.75%

• Expense ratio: 0.80%

Amana Mutual Funds Trust Growth Fund Investor

This fund seeks long-term capital growth by investing primarily in common stocks, including foreign stocks, that are consistent with Islamic principles. The portfolio is weighted toward large-cap value stocks, and its top holdings include Apple and Intuit.

• Year-to-date performance: -19.98%

• 5-year performance: 17.85%

• 10-year performance: 14.36%

• Expense ratio: 0.95%

T. Rowe Price All-Cap Opportunities Fund

The All-Cap Opportunities Fund from T. Rowe Price invests at least 65% of its assets in the stocks of American companies operating in sectors that T. Rowe Price has identified as having the fastest or greatest growth potential. It may also invest in foreign stocks. The fund is slightly more risky than average, and it offers high returns.

• Year-to-date performance: -19.01%

• 5-year performance: 18.61%

• 10-year performance: 16.54%

• Expense ratio: 76%

What Is the Average Mutual Fund Return?

Average mutual fund returns vary based on the mutual fund type. The best mutual funds to invest in span the gamut from exceptionally high returns to fairly modest returns, all of which are related to risk.

• Stock mutual funds — high risk: 12%

• Bond mutual funds — low risk: 5%-6%

• Money market mutual funds — lowest risk: Around 1%

When looking at returns, you should look at not only the year-to-date return, but also five-year, 10-year and lifetime appreciation.

What To Consider When Choosing a Mutual Fund

There’s no surefire way to pick winning mutual funds, but you can maximize your chances of achieving the right balance between growth and risk. If you’re early in your career and have many years before retirement, for example, you might choose funds that invest in riskier small-cap stocks with the potential to produce outsize returns. If you’re closer to retirement, on the other hand, you might opt for less risky funds, like those that invest in Treasury bonds or large-cap stocks, despite their generally smaller returns.

Some mutual funds, called target funds, select a mix of securities based on a target retirement date. Over time, and as that target date approaches, the fund managers rebalance the mix of assets to reduce risk. This is great for a “set and forget” retirement fund.

John Csiszar contributed to the reporting for this article.

Data is accurate as of May 16, 2022, and subject to change.

This article has been updated with additional reporting since its original publication.

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This article originally appeared on GOBankingRates.com: Best Mutual Funds To Invest In Now: 12 Top Performers