Mutual funds are a great investment vehicle for people who want a margin of safety and to have a professional money manager handle their capital. That helps explain why mutual funds continue to grow in popularity. Today, more than half (52%) of Americans are invested in mutual funds, up from less than 6% of people in 1980. Generally speaking, mutual funds provide investors with broad exposure to a basket of stocks selected by a professional and actively managed. Because of the actively managed nature of mutual funds, they tend to charge higher fees than more passively managed exchange-traded funds (ETFs).
While some investors and analysts grumble about the high fees charged by mutual funds, there are many funds that offer low fees and expert stock picking. Sourcing these types of mutual funds is advantageous and can help investors save for a comfortable future. Here are three mutual funds to invest in for pro-management and low fees.
Vanguard Information Technology Index Fund Admiral Shares (VITAX)
When it comes to mutual funds, Vanguard offers the lowest fees around. The company’s flagship technology-focused fund, the Vanguard Information Technology Index Fund Admiral Shares (NASDAQ:VITAX) charges a management fee of only 0.10%, which is rock bottom for the industry. For that fee, investors get a fund that holds 319 stocks, including prominent tech names such as Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA) and Adobe (NASDAQ:ADBE) — to name a few.
This fund, focused entirely on companies in the electronics and computing industries, has a strong track record of growth. So far in 2023, the VITAX mutual fund is up 33% as many of its tech holdings have seen their share prices surge with the market rebound from 2022’s downturn. The nice thing about this actively managed tech fund is it also pays a regular dividend to investors. Currently, Vanguard’s VITAX fund pays a quarterly distribution of 44 cents per share.
Schwab Core Equity Fund (SWANX)
For more diversity, there is the Schwab Core Equity Fund (NASDAQ:SWANX) from investment giant Charles Schwab (NYSE:SCHW). The fund also contains many tech stocks, including Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). However, its portfolio also includes energy companies such as Exxon Mobil (NYSE:XOM), healthcare companies like Johnson & Johnson (NYSE:JNJ) and even Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B).
In addition to its diversity, the SWANX fund is also more targeted, holding a total of 52 stocks. The expense ratio is higher at 0.73% but still reasonable for a mutual fund of its size. And it pays an annual dividend of $2.79 per unit held, giving it a yield of 1.26%. In terms of performance, the fund has returned 12% to investors so far in 2023. This fund is a good bet for investors wanting a targeted and diverse group of leading U.S. large-cap stocks.
Vanguard European Stock Index Fund Admiral Shares (VEUSX)
Investors wanting exposure to foreign stocks should consider the Vanguard European Stock Index Fund Admiral Shares (NASDAQ:VEUSX). This is a mutual fund offering broad exposure to the European market. It’s a big fund that holds more than 1,300 stocks that span the entire European region and all economic sectors. As with all Vanguard funds, the VEUSX mutual fund has a low management expense ratio of just 0.13%. However, note that the fund requires a minimum investment of $3,000.
Some of the major holdings in VEUSX include sizable European concerns such as food giant Nestle SA (OTCMKTS:NSRGY), drug maker Novo Nordisk (NYSE:NVO) and energy company Shell (NYSE:SHEL). Nearly 100% of the stocks in the fund are based on the European continent. Over the past year, the VEUSX fund has increased nearly 20%. Like nearly all Vanguard funds, this one pays a quarterly dividend of 32 cents. This investment is a great option for investors who want broad exposure to foreign markets.
On the date of publication, Joel Baglole held long positions in NVDA, AAPL and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
