Top 5 Biggest Best Mutual Funds of 2018
There's safety in numbers, the old saying goes, and when it comes to mutual fund investing, it's not a bad principle. Larger funds typically have lower expense ratios, which may improve performance over time, and larger funds provide access to premiere money managers who specialize to a very granular level.
Currently, two companies dominate the domestic mutual fund market. Vanguard, with $4.5 trillion in assets under management (AUM) in its mutual funds, is the clear leader, with eight of the top ten largest mutual funds. Fidelity, with $1.97 trillion in AUM, is a distant second, but it is still more than respectable in terms of its family of funds. (See also: Fidelity vs. Vanguard: Which Is Better Suited to You?)
If you're looking to cash in on the potential advantages of size in your mutual fund investments, here are the five largest mutual funds for 2017. Note: All figures were current as of January 2018.
1: Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
- Issuer: Vanguard
- Assets under management: $657 billion
- Expense ratio: 0.15 percen
- 1-year performance: 20.51 percent
- 3-year annualized performance: 10.43 percent
This is another passively managed fund that tracks the CRSP U.S. Total Market Index. Expenses are a bit higher than the Admiral-class VTSAX, but the minimum investment is also considerably lower at just $3,000. The fund's top ten holdings include household names like Apple Inc. (AAPL), Microsoft Corporation (MSFT), Amazon.com, Inc. (AMZN) and Johnson & Johnson (JNJ). With low expenses and broad exposure to the U.S. equities market, VTSMX is a solid core equity holding.
2:Vanguard Institutional Index Mutual Fund (VINIX)
- Issuer: Vanguard
- Assets under management: $233 billion
- Expense ratio: 0.04 percent
- 1-year performance: 21.23 percent
- 3-year annualized performance: 10.82 percent
VINIX is benchmarked to the S&P 500 and is passively managed, essentially replicating the index. As an Institutional-class investment, VINIX is usually reserved for elite corporate clients (the minimum investment to get in is $5,000,000) and is a popular choice for 401(k) plans. Donald Butler, a Vanguard principal, manages the fund.
3:Vanguard 500 Index Fund Admiral Shares (VFIAX)
- Issuer: Vanguard
- Assets under management: $383 billion
- Expense ratio: 0.04 percent
- 1-year performance: 21.23 percent
- 3-year annualized performance: 10.82 percent
This is the granddaddy of all index funds – the first of its type, with an inception date of November 2000. Pegged to the S&P 500, VFIAX offers broad exposure at extremely low holding costs. In fact, although the S&P comprises entirely domestic stocks, the companies in the index generate roughly 50 percent of their sales internationally, giving you global exposure (or so Warren Buffett and Jack Bogle, Vanguard's founder and the first to introduce indexing in funds, believe). It's worth noting that, unlike Vanguard's Investor-class funds, which require a $3,000 minimum, you'll need $10,000 to get into VFIAX.
4:Fidelity Government Cash
Reserves (FDRXX)
This is a very old, established money market fund that aims to preserve capital and liquidity for income investors. The fund's assets are virtually entirely invested in cash, CDs and government Treasury bills. If you're looking for a stable place to park some cash, this is a solid choice, with low expenses for a fund of this type.
5:Vanguard Total Stock Market Index Fund Admiral (VTSAX)
VTSAX is an indexed fund, tracking the CRSP U.S. Total Market Index. It offers broad exposure to the entire domestic equity market, including a blend of small, mid and large capsplus value stocks. There are over 3,500 equities in the fund's basket of holdings, which is heavily tilted toward financials and technology. It's a great choice for both growth andincome investors, with a $10,000 minimum investment.
Reserves (FDRXX)
- Issuer: Fidelity
- Assets under management: $135 billion
- Expense ratio: 0.35 percent
- 1-year performance: 0.56 percent
- 3-year annualized performance: 0.22 percent
This is a very old, established money market fund that aims to preserve capital and liquidity for income investors. The fund's assets are virtually entirely invested in cash, CDs and government Treasury bills. If you're looking for a stable place to park some cash, this is a solid choice, with low expenses for a fund of this type.
5:Vanguard Total Stock Market Index Fund Admiral (VTSAX)
- Issuer: Vanguard
- Assets under management: $657 billio
- Expense ratio: 0.04 percent
- 1-year performance: 20.63 percent
- 3-year annualized performance: 10.54 percent
VTSAX is an indexed fund, tracking the CRSP U.S. Total Market Index. It offers broad exposure to the entire domestic equity market, including a blend of small, mid and large capsplus value stocks. There are over 3,500 equities in the fund's basket of holdings, which is heavily tilted toward financials and technology. It's a great choice for both growth andincome investors, with a $10,000 minimum investment.
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