5 Best Mutual Funds for a Stress-Free Retired Life – October 15, 2020

For people on the cusp of retirement, timing the markets remains a common dilemma. Now, a seasoned investor would always tell you that it isn’t possible to time the markets but what certainly can be done is to control your portfolio’s exposure to risk. Furthermore, people about to retire also mull over postponing retirement in order to save up and go all cash.

At the same time, it is important to note that for people about to retire in five or so years, any unforeseen market fluctuations make it impossible to recover losses. Furthermore, for those having a 401(k) plan with their employer should contribute at least enough so that it matches the company’s contribution.

This apart, reducing the equity proportion in the current balance and adding low-risk investments as well as income generating mutual funds within one’s 401(k) is a great option for people about to retire.

It goes without saying that lower the risk near retirement, the better it is. This implies investing in assets which not only protect the principal amount but also generate reliable and steady income. While hedging against inflation by parking one’s money in stocks is one way to go about it, it makes more sense to also hold certain funds which might shield a portfolio in case a market rout arises.

Moreover, adding bonds to your retirement portfolio not only adds income and diversification, it lowers volatility.

5 Best Choices

We have, thus, selected five mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are great for a retirement portfolio. Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Wells Fargo Core Plus Bond Fund Class A (STYAX Free Report) seeks returns through maximization of current income and capital.  STYAX invests a bulk of its assets in debt securities that include corporate, mortgage- and asset-backed securities, bank loans, foreign sovereign debt, supranational agencies, and U.S. government obligations.

This Govt Mtge-Intermediate product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

STYAX has a Zacks Mutual Fund Rank#1 and an annual expense ratio of 0.74%, which is below the category average of 0.80%. The fund has one and three-year returns of 8.7% and 5.8%, respectively.

Red Oak Technology Select Fund (ROGSX Free Report) invests 80% of its assets in securities of companies from the technology sector. The fund invests in both U.S. and non-U.S. stocks.

This Zacks Sector – Tech product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

ROGSX has a Zacks Mutual Fund Rank#2 and an annual expense ratio of 0.95%, which is below the category average of 1.29%. The fund has one and three-year returns of 32.9% and 21.4%, respectively.

TCW Select Equities Fund Class N (TGCNX Free Report) seeks appreciation of capital in the long run by investing primarily in equity securities of mid- and large-capitalization companies. The fund manager uses an approach that seeks to achieve superior long-term returns over a full market cycle by investing in companies that have strong and enduring business models and inherent advantages over their competitors.

This Large Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

TGCNX has a Zacks Mutual Fund Rank#1 and an annual expense ratio of 1.00%, which is below the category average of 1.05%. The fund has one and three-year returns of 40.4% and 23.1%, respectively.

Fidelity Advisor Series Growth Opportunities Fund (FAOFX Free Report) seeks growth of capital by investing primarily in common stocks. The fund invests in securities of only those companies which the Fidelity Management & Research Company (FMR) believes have above-average growth potential. FAOFX securities of both U.S. as well as non-U.S. based companies.

This Large Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FAOFX has a Zacks Mutual Fund Rank#1 and an annual expense ratio of 0.01%, which is below the category average of 1.05%. The fund has one and three-year returns of 62.7% and 37.6%, respectively.

Franklin DynaTech Fund Class A (FKDNX Free Report) aims for capital appreciation. The fund primarily invests in common stocks of companies that the fund manager believes are leaders in innovation, take advantage of new technologies, have superior management and benefit from new industry conditions in the dynamically changing global economy.

This Sector – Tech product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FKDNX has a Zacks Mutual Fund Rank#1 and an annual expense ratio of 0.86%, which is below the category average of 1.05%. The fund has one and three-year returns of 46.3% and 27.9%, respectively.

Want key mutual fund info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>

Source link

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *

Get The Latest Investing Tips
Straight to your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.