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Best Mutual Fund Companies

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Investing in mutual funds is a popular option for building long-term wealth. With mutual funds, you essentially pool your money with other investors to purchase stocks and bonds. Mutual funds can be a way to keep your investment portfolio diversified, which helps to minimize risk.

For help choosing the best mutual fund company for your investing goals, read our consumer reviews of the most popular mutual fund companies today.

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What are mutual funds?

Mutual funds are a type of investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds and other assets. Investors buy shares in the fund, which represent their portion of ownership.

Mutual funds are professionally managed by fund managers and offer a way to invest in a variety of asset classes without needing a lot of money to start. (While there are some funds with high minimum investments, there are also funds that require no minimum investment.)

Types of mutual funds

There are several types of mutual funds, including equity, fixed-income, balanced and specialty funds. When choosing a mutual fund, ensure the type aligns with your investment goals, risk tolerance and timeframe.

  • Equity funds, the largest group of mutual funds, are made up of stocks and can provide capital growth, steady dividends or both, depending on which stocks the fund is invested in.
  • Fixed-income funds, also called income funds or bond funds, consist of investments in both government bonds and private companies. They are designed to provide regular income to shareholders and typically offer a higher yield than certificates of deposit (CDs) or money market funds, but have varied risk levels.
  • Money market funds consist of short-term debt instruments, like Treasury bills, and are one of the safest mutual fund options. They usually offer a larger return than most savings accounts but a smaller return than many CDs.
  • Index funds are referred to as passively managed funds because they include the same investments as the market and are thus not actively managed. There are many different indexes with different profiles, such as large-cap stock, small-cap stock, growth stock, value stock and international stock.

» MORE: What is a good investment?

How much do mutual funds cost?

Expect to pay fees for the service of having your assets professionally managed, as well as administrative costs. In 2022, the average expense ratio for both actively managed and index equity mutual funds was 0.44%, according to the Investment Company Institute.

Loads vs. no-load funds

A “load” is a sales charge or fee imposed by certain mutual funds when you buy or sell shares of the fund. It is a specific fee separate from the transaction cost.

Not all mutual funds charge loads, and these are known as no-load funds. However, no-load funds can still charge fees that are not sale loads, as well as operating charges.

Other loads to know about include:

  • Front-end loads: Front-end load funds charge investors at the time they purchase shares in the mutual fund.
  • Back-end loads: Funds with a back-end load charge shareholders when they sell shares in the fund. In some cases, a back-end load is only charged if investors sell shares within a certain timeframe.
  • Level loads: Also known as a 12b-1 fee, a level load is an ongoing annual fee charged by certain mutual funds to cover distribution and marketing expenses.

How are mutual funds managed?

Professional management can be both an advantage and a drawback of mutual funds. Mutual funds allow smaller investors to access professional management in ways that would likely be cost-prohibitive outside the fund; however, some advisors debate whether professionals are any better at choosing investments than laypeople.

Look at the fund’s mandate and the management tenure to fully evaluate the benefits of the fund’s management.

  • Mandate: You don’t want to buy a fund focused on a single industry when you want a diversified portfolio. To ensure a fund is being managed in a way that suits your goals, read the fund’s mandate, then look at its holdings to see if the managers are fulfilling that mandate in their investments.
  • Management tenure: Find out how long the fund’s managers have been in place. This information should be in the fund’s prospectus, but you can also ask any salesperson. Ideally, the manager will have been in place for several years with a successful track record.

» MORE: How to choose a financial advisor


How do I buy shares in a mutual fund?

One option for buying shares in a mutual fund is to set up a self-managed brokerage account online, which allows you to buy and sell stocks, bonds and mutual funds without the assistance of a financial advisor. Another option is to buy mutual fund shares directly from the fund manager or with the assistance of a financial advisor.

What are classes of mutual fund shares?

Mutual funds are classified as Class A, Class B and Class C. These classes determine which fees you will pay and when. For example, Class A mutual funds have a one-time fee charge, while Class C shares can charge an annual fee. Regardless of which share class you buy, you’ll be invested in the same things.

Who can invest in mutual funds?

Anyone can invest in mutual funds, so long as you can meet the minimum investment criteria (while there are some no-minimum funds, others can have minimums ranging from $500 to $3,000 or more). Since many mutual funds have a low-risk holding, they may appeal to risk-averse investors and retirees.

Bottom line

Mutual funds allow individual investors to pool their money and take advantage of professional management while diversifying their portfolios across various asset classes. Taking time to review mutual fund companies can help you discover which company has the right costs and opportunities to fit your investment goals.

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. U.S. Securities and Exchange Commission, “Mutual Funds.” Accessed July 7, 2023.
  2. Investment Company Institute, “Trends in the Expenses and Fees of Funds, 2022.” Accessed July 6, 2023.
  3. Fidelity, “Understanding Fidelity's FundsNetwork Fees.” Accessed July 6, 2023.
  4. Nasdaq, “5 Mutual Funds With Huge Minimum Investments.” Accessed July 7, 2023.
  5. U.S. Securities and Exchange Commission, “No-load Fund.” Accessed July 10, 2023.

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    Author reviews for mutual fund companies

    American Century

    American Century Investments was established in 1958 with two funds and now offers dozens of equity and fixed-income mutual funds to individual investors and those investing through advisors.

    Read more about American Century
    Prudential Investment Management Services

    Prudential was founded in 1875 to provide affordable life insurance policies to working class individuals in New Jersey. Today, the company offers a wide variety of financial products, including life insurance, annuities and mutual funds to consumers around the world.

    Read more about Prudential Investment Management Services
    Fisher Investments

    Fisher Investments, headquartered in Camas, Washington, is a fee-only financial advising firm. It was founded in 1979 and now serves over 35,000 clients. The firm offers a variety of financial and investment services and can help investors find mutual funds that meet their goals.

    • Personalized recommendations: Fisher Investments prides itself on excellent customer service, and its advisors make personalized recommendations for clients. They can advise clients on whether mutual funds are a good choice for their investment goals.
    • Fiduciary advisors: The advisors at Fisher Investments serve as fiduciaries to their clients. This means the advisor is legally required to make only suggestions that are in the client’s best interest, as opposed to suggestions that might be more profitable to the advisor.
    • Financial services: Fisher Investments offers a variety of financial services, including annuity evaluation, financial planning, portfolio management, institutional investing and 401(k) options for employers.
    • Fee-based advisors: Fisher Investments is a fee-based financial advising firm, which means it earns money based on the amount of clients’ investments. Those who are looking for a financial advisor will likely save money with a fee-based firm.
    • Investor education: Fisher Investments offers a variety of free resources for investors wanting to learn more about the stock market. The company’s Stock Market Outlook is a quarterly publication with market insights, and MarketMinder offers daily market commentary via email and a mobile app.
    J.P. Morgan

    J.P. Morgan has roots going back to 1799 and has existed under the name J.P. Morgan for over 100 years. The firm offers a variety of financial services including investment banking, asset management, wealth management, brokerage accounts, mutual funds and more.

    • Fund options: J.P. Morgan offers nearly 600 mutual funds to choose from. Fund types include fixed-income, money market, specialty and equity mutual funds as well as funds with international equities.
    • Information: The J.P. Morgan website provides in-depth information about each fund. Interested investors can access presentations, fact sheets, commentary, the prospectus, annual and semi-annual reports, fund holdings and more online.
    • SmartRetirement funds: J.P. Morgan has mutual funds specifically designed and managed for retirees and those saving for retirement. These SmartRetirement funds can be chosen based on when you plan to retire.
    • Investor education: J.P. Morgan offers a Guide to the Market for investors who want to learn more. Quarterly reports are available for free to everyone; monthly updates are available to clients.
    • Online tools: Those who create an online account can access several tools including a comparison tool. Account holders can also save and organize information and access additional market commentary.
    Merrill Edge Mutual Funds

    Bank of America bought Merrill Lynch in 2008, and Merrill Edge launched in 2010 to streamline services for existing Bank of America and Merrill Lynch brokerage customers. Merrill Edge offers a wide variety of financial services, including managing mutual funds. Both those with Merrill Edge accounts and those with accounts at other firms can purchase Merrill Edge mutual funds.

    Read more about Merrill Edge Mutual Funds
    T. Rowe Price

    T. Rowe Price offers a wide variety of financial products, including mutual funds, to investors. Its mutual funds are all actively managed, and many have low fees. The company was founded in 1937 and is headquartered in Baltimore.

    Read more about T. Rowe Price

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