Core Stock Funds
These top-rated equity funds could be solid anchors for investors’ U.S. exposure.
Name
|
Ticker
|
Category
|
Morningstar Analyst Rating
|
|---|---|---|---|
| Large Blend | |||
| Large Growth | |||
| Large Value | |||
| Large Growth | |||
| Large Blend | |||
| Large Value | |||
| Large Blend | |||
| Large Blend | |||
| Large Growth | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Growth | |||
| Large Blend | |||
| Large Value | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend | |||
| Large Growth | |||
| Large Blend | |||
| Large Blend | |||
| Large Blend |
The “core” of a portfolio is where the biggest chunk of your money is invested. How the core performs will largely dictate how the overall portfolio performs. Investors may have a core for their stock exposure and a core for their bond exposure, and in each case, the core may occupy 60%-80% of assets (or more). For stocks, the core is typically large companies with some growth and some value characteristics. For this list, we looked for highly rated U.S.-stock funds that primarily invest in large companies. Depending on their strategies, they may have more or less exposure to smaller firms, so investors may want to supplement picks here with a Medalist fund from our U.S. small or mid-cap categories as well as a selection from our Core Foreign Funds picks list.
List Criteria
Large-Cap U.S. Funds
The funds in this list all hold the largest U.S. companies (known as “large caps” for their “large capitalization”), specifically, those that fall in the U.S. large value, large blend, and large growth categories. Morningstar defines large-cap stocks as the group that accounts for the top 70% of the capitalization of the U.S. market. Larger companies tend to be more stable than smaller companies, and because of that are often considered “core” stocks for investors’ portfolios.
Gold-Rated Funds
The Analyst Rating for Funds is based on our fund analysts’ conviction in a fund’s ability to outperform its peer group (funds in the same category) and benchmark on a risk-adjusted basis over the long term. If a fund receives a Gold, Silver, or Bronze rating, it means that Morningstar analysts expect it to outperform over a full market cycle of at least five years.
No-Load Funds
This list includes only no-load funds. “No load” refers to a mutual fund that does not charge a fee (known as a load) for buying or selling its shares; the investor typically buys no-load funds directly from a fund company or through a fund supermarket. Load funds, on the other hand, are sold by an advisor or broker and charge a percentage fee at purchase or sale of the shares, which is meant to be compensation for the planner’s investment-selection advice. (Note: Not all advisors sell load funds. Many are compensated via a flat fee or a percentage of all assets under management.) Whether a fund charges a load or not isn’t a reflection of its underlying quality. Many load funds are also Medalists, and some load funds are available without a load through 401(k) or other retirement plans. But we’re including only no-load funds here, since this list is designed to help investors who are primarily doing their own fund-picking.
Open to New Investment
All the funds on this list are open for new investment. Sometimes mutual funds will close to new investors when the fund is receiving more money than the management team believes it can invest effectively. Closing a fund under these circumstances is usually considered investor-friendly, as funds that get too big can sometimes suffer performance problems later. Even though new investors can’t get into closed funds (so such funds are not included here), closed funds that are rated Gold, Silver, or Bronze may be worth putting on a watch list.
Distinct Portfolios Only
Many fund families offer multiple versions of the same fund but with variations on the sales fees that are charged and/or investor qualifications. Screening for “distinct portfolios only” removes all but one of these options to avoid having several share classes of the same offering cluttering the list. Morningstar normally designates the oldest share class as the distinct portfolio. In some cases, this share class may be for institutions (such as company retirement funds) or otherwise have a high investment minimum. In those cases, investors may want to consider an “investor” share class of the same fund, though the fund expenses may be higher for those share classes.