Best Mutual Funds For 2019

 

Champions outperform. Legends do it repeatedly. It’s as true for mutual funds as for athletes. If you’re looking to fill out your investment portfolio lineup, you can speed the search by starting with funds that outperformed recently as well as over the long haul. And that’s what you get with IBD’s Best Mutual Funds 2019.

At a time when Wall Street pundits bemoan the scarcity of mutual funds that beat the broad market, winners of IBD’s fourth annual Best Mutual Funds Awards are the moneymaking exceptions. And they’ve done it again and again.

Is a long-term leader your best bet for future performance, or a mutual fund that deftly navigated recent stock market trends? With these 357 funds, you get both, plus superior performance in the midrange performance time frames that investors often watch.

The awards go to stock funds and bond funds that beat their benchmark indexes over the past one, three, five and 10 years as of Dec. 31.

View the full IBD Best Mutual Funds Awards report

View lists of the Best Mutual Funds Awards by category

Best Mutual Funds To Invest In

Investors should consider these best mutual funds for their portfolios because their managers have steered them to outperformance through unpredictable ups and downs in the markets. That includes the wicked whipsaw turbulence in last year’s fourth quarter, when S&P 500 index funds tracked by Lipper cratered 13.82%.

Best Mutual Funds Awards winners can fill a variety of roles in your investment strategy. The award winners include broadly diversified stock mutual funds, which can anchor the core of your portfolio. They also include specialized mutual funds, which can fill the sector, geography and style niches in your nuanced asset allocation checklist.

Best Mutual Funds 2019 Details

Our summary list of award winners highlights the top five in each of 13 categories and subcategories. Click through from each section to see the full list of award winners of that type.

Our categories include U.S. Diversified Stock Funds and its six subcategories of Growth, Blend, Value, Large Cap, Midcap and Small Cap. The benchmark for all seven of these groups is the broad U.S. stock market in the form of the S&P 500. Award winners in the Sector Funds category also are measured against the S&P 500.

Other categories are International Stock Funds, U.S. Taxable Bond Funds, Municipal Bond Funds and International Bond Funds. The best mutual funds in these categories are measured against their related benchmark indexes.

We also identify winners among Index Funds. It’s their first year in a category of their own.

Which Are The Best Mutual Funds To Invest In?

The IBD Best Mutual Funds 2019 list is a great tool for evaluating mutual funds to invest in. It doesn’t matter whether you’re searching for top-performing funds to bolster your current portfolio or you are new to mutual fund investing.

For instance, you or your financial advisor can pick funds from the U.S. diversified and its six subcategories to build core positions in your diversified retirement portfolio.

You can go a step further, diversifying and gaining additional exposure to targeted market niches by buying shares in the best sector funds, international equity funds and bond funds.

Before making any purchases, be sure to check which funds best fit your goals, stomach for volatility and investment time horizon.

Most any financial advisor can help you identify investments that suit your goals, risk tolerance and time frame. Online tools can help you too. Most major mutual fund companies and online stock brokers offer similar financial planning and asset allocation tools.

Check their websites for tools and forms, as well as for fund information such as prospectuses, quarterly reports and manager commentaries.

How To Compare Mutual Funds

What if a fund you already own is not on the awards winners list?

That doesn’t necessarily mean you should dump it. Assess whether the portfolio managers are competent and if the fund meets a specific need in your portfolio. Did it beat its benchmark in most time periods? And does it continue to fill a need in your portfolio? Then you might want to keep it.

But if not, then you might want to consider replacing it with a fund on the Best Mutual Funds 2019 Awards list.

Highlights Of Best Mutual Funds 2019 Winners List

To be eligible for IBD’s Best Mutual Funds 2019 Awards, funds in all categories must have at least $100 million in assets and a track record of at least 10 years.

Among U.S. diversified stock mutual funds, 111 earned Best Mutual Funds Awards, meaning just 10% of the 1,087 eligible funds outperformed the S&P 500 in all four time frames measured. That was down slightly from 2018’s 115 winners.

Stock funds in the Growth Stock and Large Cap categories collected an additional 108 and 94 awards, respectively.

In the sometime volatile bull market of the past decade, investors frequently sought safe havens in dividend-paying stocks, which tend to be larger companies. Investors also wanted to benefit from the popularity of fast-growing FANG stocks — tech giants Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google-parent Alphabet (GOOGL).

Those preferences were reflected in the massive buying by passive index funds and ETFs that are market-cap weighted, says Margaret Vitrano, co-manager of $12.5 billion ClearBridge Large Cap Growth Fund (SBLGX), a repeat IBD Best Mutual Funds Award winner in 2019.

Growth Funds Vs. Value Funds

No value funds received a Best Mutual Funds Award this year. That repeated their 2018 shutout. Though value funds might still fill a need in your asset allocation model, there’s no getting around the fact that they have had difficulty beating the S&P 500 in a 10-year-old bull market led by growth stocks.

IShares Russell 1000 Value ETF (IWD), a proxy for value stocks, lost 8.42% in 2018, according to Morningstar. That was nearly double the 4.38% setback by the S&P 500. It was also worse than the 1.65% decline by the growth-tracking iShares Russell 1000 Growth ETF (IWF).

There were three award winners among blend funds, which invest in both growth and value-oriented stocks.

Sector funds won 25 awards, with most of those going to funds that focus on tech stocks. Unlike with the other categories, the summary winners table lists the top performing funds of the five top performing sectors. Since only four kinds of sectors produced award-winning funds, the second-best tech fund was included along with the top consumer cyclical, communications and health care funds.

Best International Stock Funds

International stock mutual funds had the largest number of Best Mutual Funds 2019 Awards, with 134 winners. Funds with exposure to the U.S. did particularly well.

Best Bond Funds

Among bond funds, 34 U.S. taxable bond funds won Best Mutual Funds Awards. That was down sharply from 253 in 2018. Rising interest rates meant falling prices for bonds, particularly for funds with longer average maturities. Falling prices made them less attractive to investors and made it harder for the funds to beat the benchmark.

The number of award-winning muni bond funds totaled 33, while 10 international bond funds outperformed their benchmark for the four performance periods, earning awards.

Best Index Funds

Ten index funds claimed awards. Five of them track the Nasdaq 100 index of the largest nonfinancial stocks. In the past 10 years, as now, the cap-weighted index’s top holdings have included large, fast-growing tech stocks. Others index fund winners track tech or growth indexes and ended up holding many of the same market-leading stocks as the Nasdaq 100. Even ESG (environmental, social and governance)-leaning Vanguard FTSE Social Index (FVTSX), which screens for social, human rights and environmental criteria, has top holdings that include Microsoft (MSFT), Apple and Facebook.

Best Mutual Funds 2019 List

Go to our full list of Best Mutual Funds to see all the awards. But here’s a peek at some of the key winners:

Morgan Stanley Institutional Growth (MSEQX) copped top honors in three categories: U.S. diversified stock funds, growth stock funds and large cap funds.

White Oak Select Growth (WOGSX) led the blend funds pack.

T. Rowe Price’s New Horizons (PRNHX) and Institutional Mid-Cap Equity Growth (PMEGX) finished one-two among the midcap funds. New Horizons also finished second among U.S. diversified stock funds and growth stock funds. But take note: Henry Ellenbogen, New Horizons helmsman since March 2010, is leaving T. Rowe Price effective March 31. Joshua Spencer, manager of $5 billion T. Rowe Price Global Technology (PRGTX), will replace Ellenbogen at the helm of New Horizons. Another note about New Horizons: It was the No. 1 small-cap fund last year, but moved to the midcap category this year as its average market cap increased.

Virtus KAR Small-Cap Growth (PXSGX), Lord Abbett Micro Cap Growth (LMIYX) and Wasatch Ultra Growth (WAMCX) were this year’s top three finishers among small-cap funds.

Berkshire Focus (BFOCX), a technology fund, and Fidelity Select Retailing (FSRPX) grabbed the top two spots among sector funds.

Morgan Stanley Institutional Global Opportunity (MGGIX) and Oppenheimer International Small-Mid Company (OSMAX) set the pace in the international stock funds category. Global Opportunity’s top geographic exposure is to North America, followed by Asian emerging markets, including China, at 16.5%, all as of Dec. 31.

Franklin Convertible Securities (FISCX) set the standard for U.S. taxable bond funds.

Oppenheimer Rochester High Yield Municipal (ORNAX) was the pacesetter among tax-exempt funds.

Janus Henderson Strategic Income (HFAAX) was the leader among international bond funds.

Valic Company Nasdaq-100 Index topped the index funds category.

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