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Fund Spy: Morningstar Medalist Edition

5 Great Funds for Your Tax-Sheltered Account

Cram your tax-sheltered accounts full of Morningstar Medalists.

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What makes for a good tax-sheltered fund? For the most part, it has the same things you'd seek in a fund for a taxable account: Low costs, good management, a sound strategy, and a solid fund company. However, since tax-sheltered investments tend to be longer-term holdings, it's worth emphasizing funds that can build wealth over 15 or more years. Here are a few Morningstar Medalists for the job.

 Vanguard Target Retirement 2030 (VTHRX)
This fund is a great set-it-and-forget-it option. It's cheap, covers a wide swath of the investable market, and adjusts over time. If you already have plenty of funds, you could simplify things in one fund that you don't have to fret over. Vanguard has target-date funds that aim for a retirement date every five years, so you should be able to find one that syncs up with your retirement plans. The funds hold varying mixes of  Vanguard Total Stock Market Index (VTSMX),  Vanguard Total International Stock Index (VGTSX), Vanguard Total Bond Market II Index (VTBIX), and Vanguard Total International Bond Market Index (VTIBX).

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Russel Kinnel has a position in the following securities mentioned above: LSBDX. Find out about Morningstar’s editorial policies.