Everybody has to save money to be able to fulfill long-term goals, to buy a house, finance studies of children or to enjoy years of retirement. This money needs to be invested. But what is the best place to put your hard-earned money? There are no certainties in investing, only probabilities. You can earn or lose money. Many people witnessed this first-hand in 2008, and many people are again witnessing this in 2011.
Financial institutions offer thousands of mutual fund, selecting the right one can be tough. You always have to keep in mind that even outstanding past performance of a fund does not guarantee future success. It is always advisable to choose funds with solid long-term track records. We have compiled a list of 10 of the best mutual funds that have garnered successful returns for investors over the long-term.
1. The ING Corporate Leaders Trust Fund (LEXCX) was launched in 1935. We can consider it as a long-performer. Originally the fund held assets of 30 companies. This list has not basically changed since that time: the fund is only allowed to own the shares of these 30 companies and stocks of their direct descendents. It can sell any of these companies, but cannot add any new shares. Although this fund is rather conservative, it has built up some impressive numbers: it has returned 14.41 % over the past year, 1.27 % over the past three years, and 6.16 % over the past decade.
2. The Tributary Growth Opportunities Fund (FOGRX) is basically a mid-cap growth fund, but owns shares of large-cap and small-cap companies as well. It targets companies with above average growth characteristics and below average valuations. The fund's long-term numbers are fairly impressive, it returned 18.64 % over the past year, 6.32 % over the past three years, and 6.38 % over the past decade. This year the outstanding performance of Valeant Pharmaceuticals International and Biogen Idec has been strong contributor to the fund's success.
3. The Wells Fargo Advantage Growth Fund (SGROX) is originally a large-growth fund, but acts as a multi-cap fund looking for growth opportunities in undervalued firms. It owns primarily stocks of domestic companies and a smaller number of foreign stocks. The fund focuses recently on technology and energy. The fairly aggressive strategy of the fund brought good results: it has returned 22.20 % over the past year, 9.20 % over the past three years, and 5.46 % over the past decade.
4. The Vanguard GNMA Fund (VFIIX) is an intermediate-term fund buying government securities, suitable for investors who prefer safety. Its portfolio consists mainly of bonds issued by the Government National Mortgage Association, or Ginnie Mae. It performs solidly as a result of its conservative strategy. The fund also offers low fees. The fund has returned 5.41 % over the past year, 7.85 % over the past three years, and 5.78 % over the past decade.
5. The JPMorgan Small Cap Equity Fund (VSEAX), as reflected in its name, invests in small-cap companies. It seeks undervalued companies with leading competitive positions, foreseeable and long-lasting business models, and management that can achieve sustained growth. The fund has returned 13.52 % over the past year, 6.60 % over the past three years, and 8.46 % over the past decade.
6. The Royce Premier Fund (RYPRX) is billed as a mid-cap growth fund and is focusing on the securities of U.S. companies with stock market capitalizations up to $2.5 billion. Primary emphasis is placed on companies that possess excellent growth prospects, high internal rates of return and low leverage. The fund has returned 19.01 % over the past year, 4.80 % over the past three years, and 10.61 % over the past decade.
7. The Payden GNMA Fund (PYGNX) is a non-diversified fund, it invests mainly in National Mortgage Association mortgage-backed securities, a pool of loans backed by the U.S. government. The fund aims at preservation of capital beside a high level of total return. It has returned 5.11 % over the past year, 8.23 % over the past three years, and 5.89 % over the past decade.
8. The Dreyfus Research Growth Fund (DREQX) has traditionally taken a slow-and-steady approach, but it pulled away in 2010, returning 23 percent. It invests in stocks selected by a team of core research analysts. Its analyst show nowadays a preference for technology companies like Apple that has been a major contributor to the fund's outstanding performance. The fund has returned 13.63 % over the past year, 3.83 % over the past three years, and 2.64 % over the past decade.
9. The Buffalo Growth Fund (BUFGX) invests in the largest U.S. companies, while focusing on U.S. companies with growing foreign profits. Its portfolio consists of companies that earn at least 40 % of their revenue abroad. It has overweight positions in information hardware companies, like MKS Instruments and Qualcomm, and industrial materials companies, such as 3M and Fluor, the products of which are demanded worldwide. The fund has returned 10.08 % over the past year, 2.87 % over the past three years, and 2.95 % over the past decade.
10. The Templeton Global Bond Fund (TPINX) owns government bonds with attractive valuations from countries throughout the world. It invests in Asia and other emerging markets, and developed markets with low debt-to-GDP ratios like Australia. It is underweight traditional sectors like the euro-zone and Japan. The fund has returned 9.30 % over the past year, 12.85 % over the past three years, and 12.26 % over the past decade.
Source of performance data: Morningstar.com, 08.08.2011. Returns are annualized.
Current performance of the stock funds reflects a selling panic on the stock exchange on August 05, 2011 caused by fears of a slowing recovery.