26 October 2024
Investing in mutual funds can be like planting seeds in a garden — with the right care and attention, they can grow into something substantial over time. But, if you’re like many investors, you probably ask yourself, “Which mutual funds should I invest in right now to get the best return in the future?” Well, you’re in luck because today, we’re diving into the top mutual funds to watch in 2024.Whether you’re someone just starting out or a seasoned investor, keeping an eye on the right mutual funds can help you grow your wealth for years to come. In this article, we’ll break down some of the funds that are expected to perform well in 2024, discuss why they’re worth your attention, and touch on how you can choose the best one for your own needs. Let’s get started.
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What Makes a Mutual Fund Worth Watching?
Before we dive into specific mutual funds, let's first clarify what makes a mutual fund worth watching in the first place. Mutual funds are essentially a basket of investments, which usually include stocks, bonds, or other securities. They provide diversification, which helps to lower risk — but not all funds are created equal.
Key Factors to Consider:
- Performance Track Record: How well has the fund performed in the past? While past performance doesn’t guarantee future results, it gives you a good idea of the manager’s skill.- Expense Ratio: These are the fees you pay to invest in the fund. The lower the expense ratio, the more of your money stays invested.
- Management Team: Experienced fund managers can make or break a mutual fund.
- Risk Level: Are you comfortable with the amount of risk involved in the fund's investments?
- Objective Alignment: Does the fund align with your financial goals (e.g., growth, income, or capital preservation)?
Now that we have the basics covered, let's look at some of the top mutual funds to watch in 2024.
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1. Vanguard 500 Index Fund (VFIAX)
If you’re a fan of simplicity and low-cost investing, the Vanguard 500 Index Fund (VFIAX) should be on your radar. This fund mirrors the performance of the S&P 500, which includes the 500 largest U.S. publicly traded companies. Think of it as buying a little piece of the U.S. economy.
Why Watch It in 2024?
- Stellar Long-Term Performance: Historically, the S&P 500 has delivered an average annual return of around 10%. While the market has ups and downs, this fund has consistently provided solid returns over the long haul.
- Low Expense Ratio: The expense ratio for VFIAX is incredibly low, at just 0.04%, meaning you keep more of your returns.
- Diversification: With exposure to 500 of the biggest companies, you’re essentially spreading your risk across a wide array of industries.
If you’re looking for a “set it and forget it” investment that’s both reliable and cost-effective, VFIAX is a great choice for 2024.
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2. Fidelity Contrafund (FCNTX)
Next up is Fidelity Contrafund (FCNTX), one of the most popular actively managed funds in the world. While index funds like VFIAX follow the market, actively managed funds like FCNTX rely on the fund manager’s expertise to outperform the market.
Why Watch It in 2024?
- Strong Leadership: Will Danoff, the fund’s manager, has been at the helm of FCNTX for over three decades. His track record is impressive, consistently beating the S&P 500 over the long term.
- Growth Focus: Contrafund is growth-oriented, focusing on companies with strong potential for future earnings. It holds major stakes in tech giants like Amazon, Meta, and Microsoft.
- Flexibility: Unlike index funds, FCNTX doesn’t have to follow a specific benchmark, allowing the manager to pivot based on market conditions.
If you're looking for a fund that could potentially outperform the broader market in 2024, Fidelity Contrafund is definitely worth keeping an eye on.
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3. T. Rowe Price Blue Chip Growth Fund (TRBCX)
The T. Rowe Price Blue Chip Growth Fund (TRBCX) is another growth-focused mutual fund, but with a specific emphasis on large-cap “blue chip” stocks. These are companies with a proven track record of success — the type of businesses that can weather economic storms.
Why Watch It in 2024?
- Top-Notch Holdings: TRBCX is heavily invested in tech and healthcare, two sectors that are expected to continue performing well in 2024. Companies like Apple, Google, and UnitedHealth Group are among its top holdings.
- Aggressive Growth: This fund is designed for investors who want to grow their wealth aggressively. While it’s a bit riskier than more balanced funds, the potential for larger returns is there.
- Proven History: Over the past decade, TRBCX has consistently outperformed its benchmark, making it a solid choice for investors with a high risk tolerance.
If you’re willing to take on a bit more risk for the potential of high returns, TRBCX could be a smart addition to your 2024 portfolio.
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4. Dodge & Cox Stock Fund (DODGX)
For those who prefer a more value-oriented approach, the Dodge & Cox Stock Fund (DODGX) is a classic pick. This fund focuses on undervalued companies that have strong long-term growth potential, and it’s known for its deep value investing strategy.
Why Watch It in 2024?
- Value Investing Focus: In a market that’s often dominated by growth stocks, value investing can offer a more stable approach. DODGX targets companies that are trading below their intrinsic value, providing the potential for strong returns as the market corrects.
- Experienced Management: The fund’s management team has decades of experience and is known for its patient, long-term approach.
- Diversified Portfolio: DODGX holds stocks across a variety of sectors, including financials, healthcare, and energy, which can provide some insulation during periods of market volatility.
If you believe that 2024 could be a year where value stocks shine, DODGX is a fund to keep on your radar.
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5. Vanguard Balanced Index Fund (VBIAX)
If you want a balanced approach that includes both stocks and bonds, the Vanguard Balanced Index Fund (VBIAX) might be the perfect fit. This fund offers a mix of 60% stocks and 40% bonds, making it a great option for investors who want growth but with a bit more stability.
Why Watch It in 2024?
- Balanced Approach: The 60/40 split between stocks and bonds gives you exposure to equity markets while also providing a safety net with bonds.
- Low Costs: Like other Vanguard funds, VBIAX boasts a low expense ratio (currently 0.07%), meaning more of your investment stays working for you.
- Diversification: With investments in both stocks and bonds, this fund offers a well-diversified portfolio that can help mitigate risk during market downturns.
For investors who want a bit of everything — growth, income, and stability — VBIAX is a fantastic option to consider in 2024.
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6. American Funds New Perspective Fund (ANWPX)
The American Funds New Perspective Fund (ANWPX) is a global fund that focuses on companies that are positioned to benefit from changing global economies. This fund has proven to be a solid performer over the years, and with the increasing interconnectedness of global markets, it’s one worth watching in 2024.
Why Watch It in 2024?
- Global Exposure: ANWPX invests in companies from around the world, giving you exposure to international markets. This can be a great hedge if the U.S. market underperforms.
- Strong Management Team: The fund is managed by a team of experienced investors, which helps to reduce the risk of decision-making errors.
- Growth Potential: The fund focuses on companies that are expected to benefit from long-term global trends, including tech innovation and the rise of emerging markets.
For those looking to diversify beyond the U.S., ANWPX is a great option to consider.
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Conclusion: Which Fund is Right for You?
So, which mutual fund should you invest in for 2024? Well, that depends on your financial goals, risk tolerance, and investment timeline. If you’re seeking steady, long-term growth, a low-cost index fund like the Vanguard 500 Index Fund or the Vanguard Balanced Index Fund might be your best bet. On the other hand, if you’re looking for higher potential returns and are willing to take on more risk, something like the Fidelity Contrafund or the T. Rowe Price Blue Chip Growth Fund could be more up your alley.
At the end of the day, the best strategy is to diversify your portfolio and invest in funds that align with your personal financial goals. And remember, while it’s important to keep an eye on the top-performing mutual funds, successful investing is a marathon, not a sprint. Happy investing in 2024!
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Final Pro Tip: Don’t Forget to Reassess!
As you step into 2024, make sure to reassess your portfolio regularly. Life changes, the market changes, and so should your investments. Stay informed, stay patient, and watch your wealth grow!
