7 Best Mutual Funds For 2010
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By :
John Hernandez
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We're more than halfway through 2009 and staring down 2010. The economy is in turmoil with no end in site. The stock market is very uncertain and returns on these investments have become very risky. One great option to keeping a portfolio of individual stocks has been and continues to be investing in mutual funds. There are thousands of funds available, so sometimes it can be hard to tell which fund is right.
This list is a compilation of what I consider to be the best mutual funds for 2001 and beyond. While there is no set metric for measuring one fund against another in all economic climates, these are the top for today's market. In analyzing these funds, I used three criteria:
Income/Dividends - When the market is in decline, it's nice to be able to have some amount of "guaranteed" income from your investment. I heavily weighed this aspect of the funds I looked at. Whether the income is from interest in the case of bonds or dividends for mutual funds, you will be able to count on a fixed yield.
Future Trends - It's very important to be able to count on your mutual fund selections for many years to come. Three of the selections below look specifically to the future. First, there is one mutual fund that invests heavily in "green" companies. The trend of environmental awareness will continue to grow for years. Next there are two funds that invest in commodities. Commodities tend to do very well in times of inflation, and with the planet's population ever increasing, they are safe bets for today and into the future.
Past Performance - Instead of looking at short-term performance, I most heavily weighted the performance of these mutual funds over 10 years. It's not too hard to have one strong year. However, when a fund has consistent results over a long time, it's obvious that they are well-managed. It's easy to fall into the trap of chasing "hot" stocks or even mutual funds, but unfortunately these flashes are often over before you're able to get in on them. It's much better and safer to find long-term performers.
So now that I've addressed the criteria, here's the list of the top mutual funds for 2010:
American Century High-Yield Fund (AHYVX) - The focus of this fund is on income. Again, with the state of the economy, it's important to know that your investments will produce income, and this fund tops out at a yield of 9.38%, which is excellent.
New Alternative Fund (NALFX) - This fund invests in "green" companies. Their focus is in alternative energy, renewable energy, energy conservation, and environmental protection. The popularity of this movement along with the increased need for alternative energy and the steadily increasing cost of traditional energy sources makes this fund a shoe-in.
Franklin Utilities Fund (FKUTX) - Utilities funds are safe investments when the stock market is in turmoil. This utilities fund has a 10-year annualized return of 5.17% while still having a yield of 4%. This is an impressive combination, especially in today's market.
ING Corporate Leaders Trust Fund (LEXCX) - This fund hasn't performed as well as many of the other choices over the past 10 years, but it is still one of the highest performers of the main value strategy mutual funds. ING's fund also did 10% better than the S&P last year. Finally, it has a dividend yield of 2.46%.
Franklin Gold and Precious Metals (FKRCK) Since the market has been in turmoil, precious metals have done very well. As with all other commodities, this fund should continue to do well for the future due to population-based inflation. This specific fund has done incredibly well over the last ten years with an annualized return of 14.42% and a dividend yield of 8.34% currently. Until the market turns around significantly, this fund should continue to show big gains.
Vanguard Energy Fund (VGENX) - Another commodity fund, Vanguard Energy has a 10-year annualized return of 14.81% which is amazing. The commodity boom of earlier this year has faded somewhat, but don't look for energy prices to drop significantly over the long term. As with other commodities, over time, inflation and population will continue to push this fund up.
Municipal Bonds (your choice) - Local governments are in serious need of extra funds and are paying relatively high interest rates on one of the safest investments. For example, some funds in Florida are paying 6% a year in interest. While the interest on municipal bonds are generally tax exempt, this only applies to bonds within your own state. Although the interest rate isn't stellar, tax-free income of 5% to 6% makes this a no-brainer during a recession.
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Author Resource:-
Doug has been writing articles for nearly 4 years. Come visit his latest website over at http://racingrunningshoes.com which helps people find the Salomon Trail Running Shoes they are looking for.
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2009-08-20 11:20:30
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