Top 3 Mutual Funds
Black Families Should Consider
Mutual funds are an excellent way to invest and also diversify your portfolio out the gate. They’re excellent ways to grow your money over time and establish generational wealth. However, choosing mutual funds that are right for you and your family might be a daunting task. How might you know which fund to invest in and which fund to pass over? Here is a list of our three favorite mutual funds for Black families, and why you’ll want to take a closer look.
Washington Mutual Investors Fund (WSHFX)
We have showcased the Washington Mutual Investors Fund, or WSHFX, previously on our blog, but it deserves a second mention. This fund has holdings in many well-known companies that you’ve heard of and are going strong, such as Microsoft, Comcast, Pfizer, and Home Depot. The risk, therefore, is low with this fund. The majority of its holdings are domestic stocks, with Europe holding only 5% of the fund and Canada only 1.5%.
This fund is currently open, which is good news, as many funds are closed to new investors. There is a minimum fee of $250, but to open an IRA, you’re only looking at $25. WSHFX was recently chosen by Forbes as the Best Large-Cap Blend Equity Fund of 2022.
Fidelity 500 Index Fund (FXAIX)
If you’re looking for a passively-managed mutual fund, the Fidelity 500 Index Fund, or FXAIX, is an excellent choice. This fund tracks the S&P 500, which is an index that encompasses 500 of the biggest companies in the United States. There are several other index funds that follow the S&P 500, but we chose Fidelity because of their trusted name in the investment world as well as their overall 5-star rating at trusted financial websites such as Forbes and NerdWallet.
Over the past decade and a half, the S&P 500 has beaten the large-cap stock mutual funds, outperforming a stunning 90% of them. Since this fund (and others like it) follow American business giants, it’s no wonder it does so well. Here at Financial Joy School, we have also recommended another S&P 500 fund, Vanguard’s VFIAX. Whether you choose Fidelity or Vanguard, your money is well-invested.
Dodge & Cox Stock Fund (DODGX)
Recommended as one of the 15 top-rated mutual funds on The Motley Fool, this fund is a value-oriented fund which makes an excellent choice to add to your portfolio. “Value investing” is a concept that is highly acclaimed by one of the best investors in the world, Mr. Warren Buffett himself. If you’re not familiar with value investing, it is a particular strategy that keeps its eye on under-appreciated stocks by the market and by other investors. This means if one of these companies takes off and becomes fabulously successful, then you’ll become fabulously wealthy.
DODGX has a 10-year average gain of 12% and a low annual fee. The holdings within this fund include Capital One Financial and FedEx.
If you’re looking for a reliable fund, an outperforming fund, or a value-oriented fund, look no further than these, our top 3 recommendations for Black families.
To learn more about investing, closing the racial wealth gap, and growing generational wealth for Black and brown families, please visit Financial Joy School and become a part of our financial family.