Investing in mutual funds is an effective way to grow wealth and diversify portfolios, and for September 2024, several funds stand out. In this comprehensive guide, we’ll explore the Best Return Mutual Funds available in the U.S. market today. Whether you’re a seasoned investor or a beginner looking to enter the market, these top-rated funds offer a combination of high returns, low fees, and diversified portfolios.
Mutual funds are popular because they pool money from many investors to buy a broad range of stocks, bonds, or other securities. The goal of mutual funds is to maximize returns while minimizing risk through diversification. We’ll examine the best mutual funds, highlight their long-term performance, and provide insights into how to invest in them, including using SIPs (Systematic Investment Plans) in the U.S. market.
Is SIP Available in the USA?
Systematic Investment Plans (SIPs), a method of investing a fixed amount regularly into mutual funds, are indeed available in the U.S. market. Although more popular in countries like India, where SIPs are heavily promoted, U.S. investors can opt for automatic contributions to mutual funds through brokerage accounts. This allows investors to enjoy the benefits of dollar-cost averaging, reduce the impact of market volatility, and build wealth consistently over time. Many U.S. brokerage firms offer this feature, ensuring that investing is accessible and manageable.
How to Invest in SIP in the U.S. Market
Investing in SIPs in the U.S. involves setting up automatic investments through your brokerage account. Most brokerages, like Fidelity, Charles Schwab, or Vanguard, allow you to establish recurring contributions to your chosen mutual funds. Here’s how to do it:
- Open a brokerage account: Ensure your broker offers automatic investing features.
- Choose your mutual fund: Based on your financial goals, select from a diverse range of funds that suit your risk tolerance and objectives.
- Set your contribution amount and frequency: Decide how much and how often you want to invest (weekly, bi-weekly, or monthly).
- Monitor and adjust: Regularly review your investments to ensure they align with your financial goals.
Best Mutual Funds for the Highest Returns
When it comes to mutual funds offering the highest returns, it’s crucial to balance long-term growth with risk management. Here are the five best-performing mutual funds for September 2024:
| Fund Name | Ticker | 10-Year Avg. Return | Expense Ratio | Dividend Yield |
|---|---|---|---|---|
| Shelton Nasdaq-100 Index Fund Investor | NASDX | 17.09% | 0.52% | 6.71% |
| Schwab S&P 500 Index Fund | SWPPX | 12.70% | 0.02% | 1.22% |
| T. Rowe Price Mid-Cap Growth Fund | RPMGX | 10.43% | 0.76% | 5.98% |
| Fidelity U.S. Sustainability Index Fund | FITLX | 14.77% (since 2017) | 0.11% | 0.97% |
| Schwab Fundamental US Large Company Index | SFLNX | 11.29% | 0.25% | 1.63% |
1. Shelton Nasdaq-100 Index Fund Investor (NASDX)
- 10-Year Average Return: 17.09%
- Expense Ratio: 0.52%
- Dividend Yield: 6.71%
- Why Choose It: This fund is ideal for investors seeking high growth potential by investing in some of the largest tech companies like Apple, Microsoft, and Google. The tech sector has been one of the top performers over the last decade, and this fund capitalizes on that trend.
2. Schwab S&P 500 Index Fund (SWPPX)
- 10-Year Average Return: 12.70%
- Expense Ratio: 0.02%
- Dividend Yield: 1.22%
- Why Choose It: As one of the most cost-effective ways to invest in the S&P 500, this fund provides exposure to 500 of the largest U.S. companies, making it an excellent choice for long-term growth with minimal fees.
3. T. Rowe Price Mid-Cap Growth Fund (RPMGX)
- 10-Year Average Return: 10.43%
- Expense Ratio: 0.76%
- Dividend Yield: 5.98%
- Why Choose It: Mid-cap stocks tend to outperform large caps during economic expansion phases. This fund focuses on mid-sized companies with high growth potential.
4. Fidelity U.S. Sustainability Index Fund (FITLX)
- Average Annual Return (Since Inception in 2017): 14.77%
- Expense Ratio: 0.11%
- Dividend Yield: 0.97%
- Why Choose It: With the growing trend towards socially responsible investing (SRI), this fund tracks companies with strong environmental, social, and governance (ESG) practices, offering good returns while promoting sustainability.
5. Schwab Fundamental US Large Company Index (SFLNX)
- 10-Year Average Return: 11.29%
- Expense Ratio: 0.25%
- Dividend Yield: 1.63%
- Why Choose It: This fund offers a unique approach by weighting companies based on fundamental factors such as sales, cash flow, and dividends rather than market capitalization, providing an edge during market downturns.
Why Invest in Mutual Funds?
Mutual funds are an attractive investment option for several reasons:
- Diversification: Mutual funds invest in a wide range of securities, reducing the risk associated with investing in individual stocks or bonds.
- Professional Management: Fund managers handle the day-to-day decisions, making them ideal for investors who prefer a hands-off approach.
- Liquidity: Shares of mutual funds can be bought and sold easily, allowing investors to access their money when needed.
- Affordability: Many mutual funds have low minimum investment requirements, making them accessible to a wide range of investors.
SIP: A Systematic Approach to Wealth Building
SIPs offer a disciplined approach to investing in mutual funds. By investing a fixed amount at regular intervals, investors can reduce the impact of market volatility and benefit from the power of compounding over time. SIPs also promote dollar-cost averaging, which can lower the average cost per unit of a mutual fund.
SIP vs. Lump Sum: Which Is Better?
While SIPs provide steady and regular investments, lump sum investments can generate higher returns if timed perfectly. However, trying to time the market is inherently risky. For most investors, SIPs are preferable as they reduce the risk of investing during market highs and ensure that investments are made consistently.
How to Choose the Right Mutual Fund
When selecting the right mutual fund, consider the following factors:
- Investment Goals: Are you saving for retirement, a house, or college tuition? Your goals will determine whether you prioritize growth, income, or a balance of both.
- Risk Tolerance: Higher returns often come with higher risk. Assess how much volatility you are comfortable with before choosing a fund.
- Expense Ratios: Lower expense ratios are preferable, as high fees can eat into your returns over time.
- Performance History: While past performance is not an indicator of future success, funds with a strong track record may provide some indication of reliability.
Mutual Fund Fees to Watch Out For
Fees can significantly impact long-term returns. The following are common fees associated with mutual funds:
- Expense Ratio: The percentage of the fund’s assets used for administrative costs.
- Load Fees: Sales commissions paid to brokers.
- 12b-1 Fees: Used for marketing and distribution. Minimizing fees is crucial to maximizing your investment returns.
Investing in mutual funds in 2024 remains one of the best strategies for building a diversified and long-term portfolio. Whether you’re looking to grow wealth with aggressive funds like the Shelton Nasdaq-100 Index Fund or seeking stability with bond funds, there’s a mutual fund for every type of investor. By taking advantage of SIPs, U.S. investors can make disciplined, regular investments that grow over time, providing the benefits of dollar-cost averaging and reduced volatility.
To make the most of your investments, carefully consider your goals, risk tolerance, and the expense ratios of funds. This guide has highlighted five of the best mutual funds for September 2024, but as always, do your due diligence and consult with a financial advisor to ensure your portfolio is aligned with your financial objectives.
