Table of Contents
Exploring the Mutual Fund Universe
The vast landscape of mutual funds swells to a staggering 138,000 in 2022, presenting investors with a deluge of choices, albeit few standout options. The quest for worthwhile investments hinges on balancing value against the fees incurred.
The Active vs. Passive Dilemma
At the heart of investment strategies lies the dichotomy between active and passive approaches. Active managers rely on their expertise to outperform market benchmarks, whereas passive strategies opt for the simplicity of tracking indices like the S&P 500 or Nasdaq Composite.
The Cost Factor and Performance Reality
Passive funds, characterized by minimal fees, contrast sharply with active funds, which frequently entail expense ratios that exceed 1%. The statistics paint a sobering picture: fewer than 10% of mutual funds manage to outperform the S&P 500 over a ten-year period, as per S&P Dow Jones.
Unveiling the Top 401(k) Performers
This article aims to spotlight nine exceptional 401(k) funds, showcasing a diverse mix of active and passive options, validating their worth through consistent superior performance. These funds encompass a range of investment strategies, catering to the varied needs of investors.
This article aims to provide a suitable selection for every investor, presenting a well-rounded spectrum of funds that have delivered commendable performance over the past decade.
Top 9 Outperforming 401(k) Funds are:-
| Fund | Expense ratio | 10-year average return |
| Fidelity 500 Index Fund (ticker: FXAIX) | 0.015% | 11.9% |
| Fidelity Nasdaq Composite Index Fund (FNCMX) | 0.30% | 14.4% |
| Baron Partners Fund (BPTRX) | 1.69% | 19% |
| Fidelity Growth Discovery Fund (FDSVX) | 0.83% | 14.1% |
| Columbia Seligman Technology and Information (SLMCX) | 1.20% | 18.1% |
| Fidelity Select Semiconductors Portfolio (FSELX) | 0.69% | 25% |
| Fidelity Capital & Income Fund (FAGIX) | 0.72% | 6% |
| Parnassus Value Equity Fund Investor Shares (PARWX) | 0.88% | 12.5% |
| T. Rowe Price Global Stock Fund (PRGSX) | 0.82% | 11.8% |