9 Best Mutual Funds to Buy Now
If there’s one thing investors have been reminded of this year, it’s that markets don’t move in a straight line. Volatility can feel unsettling in the moment, but history shows that short-term swings are often just noise in the context of long-term growth. The challenge is staying disciplined and consistent through it.
One of the most effective ways to do that is through diversification. Mutual funds, which can hold dozens or even thousands of securities, offer a simple way to spread risk across sectors, asset classes and regions. But choosing the right fund takes more than chasing recent winners.
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“One common pitfall is putting too much weight on recent performance instead of focusing on long-term goals and risk tolerance,” says Kathy Kellert, head of index equity product at Vanguard.
She adds that investors often underestimate the impact of costs and fail to consider how a fund fits within a broader portfolio. These mistakes can lead to unintended concentration or weaker long-term results.
A disciplined focus on multiple criteria can help prevent this. D.J. Tierney, senior investment portfolio strategist at Schwab Asset Management, suggests focusing on three key criteria: performance, risk and expense. That means looking beyond raw returns to how a fund performs relative to its benchmark or peers, assessing the durability of both the fund and its provider, and accounting for all costs, including fees, taxes and trading expenses.
The following list of some of the best mutual funds to buy now meets these criteria. Whether you’re seeking a simple, low-cost index fund or a more targeted strategy to complement your existing holdings, any one of these could make a good addition — or even starting point — for your portfolio:
| MUTUAL FUND | ASSETS UNDER MANAGEMENT | EXPENSE RATIO | TRAILING-12-MONTH DIVIDEND YIELD |
| Fidelity 500 Index Fund (ticker: FXAIX) | $714.9 billion | 0.015% | 1.2% |
| Fidelity Total Market Index Fund (FSKAX) | $118.9 billion | 0.015% | 1.1% |
| Schwab U.S. Large-Cap Value Index Fund (SWLVX) | $1 billion | 0.035% | 1.8% |
| Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) | $387.5 billion | 0.04% | 4.0% |
| Vanguard Balanced Index Fund Admiral Shares (VBIAX) | $58.8 billion | 0.07% | 2.2% |
| Schwab International Index Fund (SWISX) | $13.9 billion | 0.06% | 3.5% |
| Schwab Emerging Markets Equity Index Fund (SFENX) | $1.7 billion | 0.39% | 3.7% |
| Fidelity Contrafund (FCNTX) | $157.8 billion | 0.74% | N/A |
| Vanguard Real Estate Index Fund (VGSLX) | $64.7 billion | 0.13% | 3.9% |
Fidelity 500 Index Fund (FXAIX)
The place many investors start is with an S&P 500 fund, and for good reason: The index of 500 of the largest publicly traded companies in the U.S. covers roughly 80% of the entire U.S. market, including major players like Nvidia Corp. (NVDA), Apple Inc. (AAPL) and Microsoft Corp. (MSFT). So with one fund, you can add nearly the entire stock market to your portfolio. And Fidelity’s version of an S&P 500 fund is one of the best out there.
It boasts one of the lowest expense ratios of any mutual fund at 0.015%. Its returns haven’t deviated by more than 0.02% from the S&P 500 index for the past 10 years. And with nearly 40 years of trading and $715 billion in assets under management, you can trust this fund won’t be going anywhere anytime soon. So if you’re looking for straightforward, low-cost exposure to some of the biggest names on the U.S. stock market, this fund is hard to beat.
Fidelity Total Market Index Fund (FSKAX)
An S&P 500 fund can be a good place to start, but eventually you’ll want to add a broader range of companies to your portfolio. FSKAX provides broader exposure across the entire U.S. equity market for the same cost. You can think of FXAIX as a greatest-hits album of U.S. stocks, while FSKAX includes the full discography, including smaller, lesser-known names that may or may not move the needle.
Its portfolio includes a whopping 3,773 different companies. While this is a huge range, the fund is still market-cap weighted, which means the largest companies dominate the portfolio. As a result, many of the mega-cap stocks found in the S&P 500 still drive the performance of this fund. This may be a benefit if you don’t want to feel like you’re missing out on those 500 titans but also want more diversification.
Schwab U.S. Large-Cap Value Index Fund (SWLVX)
Tracking the market at large is a great way to simplify investing, but it isn’t the only approach. If FXAIX is a bet on the market’s biggest winners and FSKAX is a bet on the entire playing field, SWLVX is a bet on a specific style: value investing.
SWLVX still targets the largest companies on the U.S. market, but it favors cheaper, dividend-paying companies that may shine when growth stocks cool off. Unsurprisingly, the top holding is renowned value investor Warren Buffett’s own Berkshire Hathaway Inc. (BRK.B).
The fund also leans more heavily into sectors like financials, industrials and health care, rather than just technology. It also underweights high-growth tech names that dominate broader indexes. This means it may not keep up during tech-driven rallies, but it will be better positioned for rising rates or inflation. Think of this as a complement rather than a replacement for growth-heavy funds.
Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
Stocks are the growth engine of an investment portfolio, but bonds are the ballast. When the seas get rocky, it’s your bond holdings that help keep everything afloat. While bonds won’t deliver the same long-term upside as stocks, they tend to be less volatile and can provide a steady stream of income. That stability becomes especially valuable during equity market downturns, when high-quality bonds often hold their value — or even rise — as investors seek safer assets.
VBTLX makes a great ballast for U.S. investors. It provides broad exposure to the U.S. investment-grade bond market, including government, corporate and mortgage-backed securities. This includes over 11,000 bonds. In other words, it’s designed to mirror the performance of the overall U.S. bond market in a single, low-cost fund.
While VBTLX has a $3,000 investment minimum for your first purchase, you can get the same fund as an exchange-traded fund for just $1 under ticker BND.
Vanguard Balanced Index Fund Admiral Shares (VBIAX)
Investing in separate stock and bond funds lets you control your risk level, but it can be tedious. If you want an even more streamlined way to add fixed-income diversification without needing to juggle multiple funds, a balanced fund may be for you.
A balanced fund like VBIAX combines both stocks and bonds into a single portfolio. “That built-in diversification, along with a disciplined asset allocation, can help take the emotion and guesswork out of investing,” Kellert says.
Balanced funds can come in many different risk levels. More stocks mean greater growth potential but also higher risk, while more bonds level everything out. VBIAX aims for a “Goldilocks” approach with roughly 60% stocks and 40% bonds.
It’s still a passive fund, but it tracks two indexes instead of one: the Bloomberg U.S. Aggregate Float Adjusted Index for broad fixed-income exposure and the CRSP US Total Market Index, which tracks nearly 100% of the U.S. stock market and includes stocks of all sizes. This enables it to keep expenses low at only 0.07%.
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Schwab International Index Fund (SWISX)
One key element of a diversified portfolio has been left off this list so far: international exposure. The U.S. stock market represents only about 60% of the total global market capitalization. If you focus only on domestic funds, you may be missing a significant portion of the opportunity set — especially during times when the U.S. economy is lagging behind foreign nations.
This is where SWISX comes into play. This global fund tracks U.S. stocks from developed foreign economies. It covers 21 developed markets in Europe, Australasia and the Far East. The bulk of the portfolio is in Japan (nearly 24%) and the U.K. (about 14.7%), but you’ll get exposure to 27 different countries in all. This includes many established global companies across sectors such as financials, industrials and health care, offering a different mix than the tech-heavy U.S. market — all for a modest expense ratio of 0.06% and no investment minimum.
Schwab Emerging Markets Equity Index Fund (SFENX)
SWISX is great for exposure to developed international markets, but these are only part of the global picture. Developed foreign nations are established, stable economies like Japan and the U.K., while emerging markets are faster-growing but less mature economies like India and Brazil. Think of developed markets as established businesses with steady growth and predictable earnings, while emerging markets are more like startups, offering higher growth potential, but with more uncertainty along the way. So if you want even broader diversification with the potential for more long-term growth, consider a fund like SFENX.
SFENX “offers the potential for value and yield factor exposures in a diversified selection of emerging-market stocks,” Tierney says. This includes countries like China, Taiwan and Brazil, where economies are expanding more rapidly than in many developed markets. These countries tend to have younger populations and growing middle classes that can support long-term economic growth.
That growth potential comes with added volatility. Emerging markets can be more sensitive to political risk, currency fluctuations and global economic shifts. But they also offer diversification benefits, as their performance doesn’t always move in lockstep with U.S. or developed international stocks. So if you already hold funds like SWISX, adding SFENX can help round out global exposure, capturing both stability in developed markets and higher growth potential in emerging economies.
Fidelity Contrafund (FCNTX)
Index funds are designed to match the market, which is all you need for a strong portfolio. But if you want a shot at beating it, an active fund like FCNTX is a good option. Instead of tracking an index, a portfolio manager selects stocks they believe are “not fully recognized by the public.” These can be value or growth stocks, and U.S. or international. The fund is 90% in U.S. stocks presently, but it covers 10 regions and 20 countries in total.
FCNTX has a nearly 60-year track record and has beat the S&P 500 over the last one-, three-, five- and 10-year periods. However, it can lag behind the broader market if the managers don’t make good picks. You’ll also have to pay a bit more for the expert oversight through a 0.74% expense ratio. So, if it starts to underperform, you’ll be paying twice over. But if you’re willing to take on that trade-off, FCNTX can serve as a complement to passive holdings or as a core position for a more hands-on approach to growth investing.
Vanguard Real Estate Index Fund (VGSLX)
Stocks and bonds are the foundation of most portfolios, but adding real estate can provide an additional layer of diversification, especially in today’s environment of elevated interest rates and shifting property values. Real estate investment trusts, or REITs, offer exposure to income-producing properties without the need to buy or manage physical real estate.
VGSLX tracks a broad basket of U.S. REITs, including companies that own data centers, hotels, office buildings and other properties. These can generate steady income through rents, making REIT funds a potential source of steady income as evidenced by the nearly 4% trailing-12-month yield on VGSLX.
Real estate also tends to behave differently than traditional stocks and bonds, which can help smooth overall returns. While higher interest rates have pressured REITs in recent years, they’ve also created more attractive entry points for long-term investors. If you want to diversify beyond stocks and bonds, VGSLX offers a low-cost, liquid way to add real estate exposure to your portfolio.
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9 Best Mutual Funds to Buy Now originally appeared on usnews.com
Update 04/17/26: This story was published at an earlier date and has been updated with new information.