When it comes to investing, there are few things that work all the time. Stock markets plunge. Even diversification won't always protect you. Yet over time losses can turn into profits, as the recent market rebound shows. Staying the course really does work.
That's the guiding principle of the MONEY 70, our recommended list of mutual and exchange-traded funds. We assembled this list with a focus on consistency, so naturally we include index funds and ETFs -- indexing is the cheapest and most reliable way to earn the returns that the market offers. And in the long run, it's likely to beat the average actively managed fund.
For actively managed funds to get on the list, they must meet strict criteria: low costs, experienced managers who look out for their shareholders, and a clear investing strategy. What you won't find are funds that happened to rocket to the top of the charts last year. We do, however, look for long-term success. Nine out of 10 MONEY 70 active funds beat their category average over the past five years.
How funds made the cut
In choosing the mutual funds and ETFs to recommend, MONEY assesses funds by four criteria:
Fees: All our funds must charge less than the average for their category. Fees take a big bite out of your returns, so low expense ratios are the best predictor of better performance, since you keep more of your gains.
Related: Basics of investing in mutual funds
Stewardship: It's important to know that fund managers put the interest of shareholders ahead of their own. We rely on Morningstar's stewardship grades, which rate funds based on their corporate culture and regulatory history.
Experience: Good long-term returns don't mean much if the manager responsible for them is no longer around. So with actively managed funds, we look for managers with long tenures and a consistent investment strategy.
Performance: Initially, to earn a spot on our list, a fund must have outpaced at least 50% of its competitors in the same category over the past five years. However, we won't automatically kick it off if returns lag later on.
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| AMRMX American Funds American Mutual Fund... | +11.67% | +6.07% | 0.63% | Value |
| SSHFX Sound Shore Fund | +18.19% | +4.49% | 0.94% | Value |
| PRFDX T. Rowe Price Equity Income Fund | +13.61% | +5.42% | 0.68% | Value |
| VWNFX Vanguard Windsor II Fund Investor S... | +14.87% | +5.49% | 0.35% | Value |
| FMIHX FMI Large Cap Fund | +15.32% | +7.47% | 0.96% | Blend |
| SLASX Selected American Shares Fund Class... | +14.10% | +2.69% | 0.95% | Blend |
| AMCPX American Funds AMCAP Fund Class A | +13.55% | +7.08% | 0.74% | Growth |
| JENSX Jensen Quality Growth Fund Class J | +13.31% | +6.77% | 0.91% | Growth |
| TRBCX T. Rowe Price Blue Chip Growth Fund... | +11.00% | +6.42% | 0.76% | Growth |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| DEFIX The Delafield Fund | +9.76% | +8.00% | 1.23% | Value |
| CAAPX Ariel Appreciation Fund Investor Cl... | +18.33% | +9.90% | 1.17% | Blend |
| WEHIX Weitz Series Fund Hickory Fund | +11.29% | +9.79% | 1.28% | Blend |
| FAMVX Fenimore Asset Management Trust Val... | +14.63% | +6.06% | 1.22% | Growth |
| FPPFX FPA Perennial Fund | +9.61% | +7.62% | 1.02% | Growth |
| POAGX PRIMECAP Odyssey Aggressive Growth ... | +22.54% | +13.90% | 0.68% | Growth |
| PRDMX T. Rowe Price Diversified Mid Cap G... | +12.35% | +6.14% | 0.97% | Growth |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| BERWX Berwyn Fund | +13.99% | +9.36% | 1.20% | Value |
| PENNX Royce Pennsylvania Mutual Fund Inve... | +12.00% | +6.23% | 0.91% | Blend |
| RYTRX Royce Total Return Fund Investment ... | +12.62% | +6.27% | 1.15% | Blend |
| PRSVX T. Rowe Price Small-Cap Value Fund | +11.49% | +7.70% | 0.98% | Blend |
| WAAEX Wasatch Small Cap Growth Fund | +11.82% | +10.24% | 1.26% | Growth |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| CSRSX Cohen & Steers Realty Shares Fund | +5.44% | +5.97% | 1.00% | Real Estate |
| PRNEX T. Rowe Price New Era Fund | +4.27% | -5.90% | 0.67% | Natural Resources |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| AEPGX American Funds EuroPacific Growth F... | +4.22% | +0.10% | 0.86% | Large Blend |
| DODFX Dodge & Cox International Stock Fun... | +7.02% | +0.40% | 0.64% | Large Blend |
| OAKIX Oakmark International Fund Class I | +12.66% | +7.85% | 1.06% | Large Blend |
| UMBWX Scout International Fund | +2.85% | +0.84% | 1.00% | Large Growth |
| VWIGX Vanguard International Growth Fund ... | +4.62% | +0.08% | 0.49% | Large Growth |
| PRIDX T. Rowe Price International Discove... | +7.44% | +3.05% | 1.23% | Small/Mid Growth |
| NEWFX American Funds New World Fund Class... | +1.32% | +0.18% | 1.07% | Emerging Markets |
| PRMSX T. Rowe Price Emerging Markets Stoc... | -5.20% | -3.36% | 1.27% | Emerging Markets |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| DODIX Dodge & Cox Income Fund | -0.58% | +6.81% | 0.43% | Intermediate Term |
| HABDX Harbor Bond Fund Institutional Clas... | -0.88% | +6.85% | 0.57% | Intermediate Term |
| FPNIX FPA New Income Fund | -0.66% | +2.79% | 0.57% | Short Term |
| LSBRX Loomis Sayles Bond Fund Retail Clas... | +1.26% | +8.11% | 0.92% | Multisector |
| MWHYX Metropolitan West High Yield Bond F... | +1.15% | +10.58% | 0.83% | High Yield |
| VIPSX Vanguard Inflation-Protected Securi... | -4.27% | +5.18% | 0.20% | Inflation Protected |
| VWITX Vanguard Intermediate-Term Tax-Exem... | -1.39% | +5.13% | 0.20% | Muni Natl Intermediate |
| TPINX Templeton Global Bond Fund Class A | -0.60% | +9.32% | 0.91% | World |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| SWPPX Schwab S&P 500 Index Fund | +13.84% | +5.46% | 0.10% | Blend |
| SWTSX Schwab Total Stock Market Index Fun... | +13.94% | +6.01% | 0.10% | Blend |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| VIMSX Vanguard Mid-Cap Index Fund Investo... | +14.51% | +6.35% | 0.24% | Blend |
| NAESX Vanguard Small Capitalization Index... | +14.56% | +8.18% | 0.24% | Blend |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| FSIIX Fidelity Spartan International Inde... | +5.22% | -1.62% | 0.20% | Large Blend |
| VGTSX Vanguard Total International Stock ... | +1.94% | -1.97% | 0.22% | Large Blend |
| VFSVX Vanguard FTSE All-World ex-US Small... | +3.83% | -- | 0.45% | Small/Mid Growth |
| VEIEX Vanguard Emerging Markets Stock Ind... | -6.71% | -1.73% | 0.33% | Emerging Markets |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| VGSIX Vanguard REIT Index Fund Investor S... | +5.81% | +5.96% | 0.24% | Real Estate |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| VBMFX Vanguard Total Bond Market Index Fu... | -1.98% | +5.38% | 0.20% | Intermediate Term |
| VBISX Vanguard Short-Term Bond Index Fund... | -0.56% | +3.35% | 0.20% | Short Term |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| PRWCX T. Rowe Price Capital Appreciation ... | +9.66% | +7.29% | 0.73% | Balanced |
| VWELX Vanguard Wellington Fund Investor S... | +8.75% | +6.41% | 0.25% | Balanced |
| TRRBX T. Rowe Price Retirement 2020 Fund | +6.38% | +4.96% | 0.70% | Target Date |
| VTTHX Vanguard Target Retirement 2035 Fun... | +8.59% | +4.06% | 0.18% | Target Date |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| VOO Vanguard S&P 500 ETF | +13.28% | -- | 0.05% | Blend |
| VTI Vanguard Total Stock Market ETF | +13.28% | +5.92% | 0.05% | Blend |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| VO Vanguard Mid Cap ETF | +14.37% | +6.49% | 0.10% | Blend |
| VB Vanguard Small Cap ETF | +14.72% | +8.34% | 0.10% | Blend |
| VBR Vanguard Small Cap Value ETF | +14.40% | +7.74% | 0.10% | Value |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| VEA Vanguard FTSE Developed Markets ETF... | +4.12% | -1.56% | 0.10% | Large Blend |
| VEU Vanguard FTSE All-World ex-US ETF | +0.31% | -1.61% | 0.15% | Large Blend |
| VWO Vanguard FTSE Emerging Markets ETF | -8.22% | -1.60% | 0.18% | Emerging Markets |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| PID PowerShares International Dividend ... | +6.06% | +0.05% | 0.56% | Dividends |
| SDY SPDR S&P Dividend ETF | +14.49% | +9.00% | 0.35% | Dividends |
| IGE iShares S&P North American Natural ... | +3.93% | -3.07% | 0.48% | Natural Resources |
| RWX SPDR Dow Jones International Real E... | -1.45% | +0.68% | 0.59% | Real Estate |
| VNQ Vanguard REIT Index ETF | +5.79% | +6.09% | 0.10% | Real Estate |
| Fund | YTD Return | 5 yr Return | Expense Ratio | Type |
|---|---|---|---|---|
| BND Vanguard Total Bond Market ETF | -2.30% | +5.46% | 0.10% | Intermediate Term |
| BSV Vanguard Short-Term Bond ETF | -0.49% | +3.43% | 0.10% | Short Term |
| TIP iShares Barclays TIPS Bond Fund | -4.25% | +5.34% | 0.20% | Inflation Protected |
Source: Morningstar (Sources for original listing in January/February 2013 issue of Money Magazine: Lipper, fund companies)
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 4.16% | 3.94% | |
| 15 yr fixed | 3.33% | 3.08% | |
| 5/1 ARM | 2.76% | 2.74% | |
| 30 yr refi | 4.00% | 3.93% | |
| 15 yr refi | 3.13% | 3.07% |
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