A Sampling Menu of Core Funds, Supporting Players
Just in time for the holiday, here are a few ideas for a balanced diet of quality funds in various categories.
Just as one might think of a Thanksgiving feast as a combination of core items (turkey, stuffing) and supporting players (cranberry sauce, pumpkin pie), one strategy for building a portfolio involves balancing core investments and complementary ones. A simple, low-cost S&P 500 index fund may offer a great foundation, but it misses the diversifying properties and potential outsized returns of small-cap and foreign-domiciled stocks, not to mention the ballast of bonds. Likewise, a portfolio dominated by emerging-markets stock funds might give you a sugar high when the category is doing well but a severe case of heartburn when it drops.
To mark the Thanksgiving holiday and provide some food for thought on the importance of a well-rounded fund diet, we've put together the following sampling menu of topnotch funds that fill core or supporting roles in a portfolio. Using Morningstar's Premium Fund Screener tool, we searched on funds from various categories and applied the "Role in Portfolio" screen. We stuck with those rated Bronze or better by Morningstar analysts to ensure they've been vetted for quality. We also limited our search to noninstitutional funds that are open to new investors to identify those with the broadest appeal.
Adam Zoll does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.