Top Best Performer Domestic Stock Mutual Fund of 2010

With the year 2010 is near its end, I always like to check the Best Performer Domestic Stock Mutual Funds or Equity Mutual Fund list for year 2010. The mutual fund list primarily consists of domestic stocks and international stocks. I’ll include the bond fund list in my next article. This article will provide the Best Performer Domestic Stock Mutual Funds.

Mutual Funds are well known to many long term investors in brokerage account or retirement account such as 401k or IRA. Mutual funds come with lower risks due to diversification in many different company stocks. Equity mutual fund will invest in different companies, sectors and even across market capitalization levels whether they are large capitalization, mid capitalization and small cap companies. Even if one or two sectors or companies don’t do well, others will balance out the overall performance.

By investing in Mutual Funds, an investor and a trader get to choose a fund manager who is an expert and a professional in choosing which stocks to invest in or switch. And this comes at a small cost. It ensures you do not have to worry about the market movements, follow economic trends and data and other news that can affect the market.

Good fund managers produce that alpha, which makes his role (and the charges) worthwhile. Fund managers differ in style of functioning. Some invest the portfolios aggressively, while others may choose a buy and hold strategy similar to Warren Buffet’s style.

Liquidity is another advantage for Mutual Funds. There are many who have invested in one of the new initial public offerings (IPOs) or shares that are no longer trading now. When there are just no buyers for these equity shares at any price, the investor faces a huge loss on this individual stock. That is where Mutual Funds provide the benefit. If you want to sell, the fund will redeem the units for you. Illiquid shares or market conditions are the fund problem, not yours.

Mutual Funds allow one to invest in amounts as low as $1,000. Regular monthly investments can become a way of life if one adopts the systematic investment plans or cost average plan that lets you invest as little as $100 per month. This kind of method also will decrease the market timing risk. This is called the dollar cost averaging concept.

The vast products of mutual funds are suited for all kinds of investors. There are all kinds of funds, large-cap, small-cap, hybrid or balanced, specialty and fixed income or bond. In the latter, there are ultra short-term funds, Long term funds, emerging bond funds, money market funds, income funds, Treasury inflation protection Securities fund (TIPS) and others.

I always use the following four criteria when I filtered the best performing mutual funds. The four criteria of choosing best performing mutual fund for 2010 are:

1. The % Year To Date (YTD) return is the highest in its own class.
2. The fund total asset is more than 1 billion
3. It has Morningstar Rating of 3 stars or more
4. It is not part of leveraged or bear fund

Note: Some of these funds may have a sales load (Front End Sales Load or Deferred Sales Load), please try to find other classes which don’t have a sales load or max 12b1 fee.

Top Performer Domestic Stock Mutual Funds of 2010 are:

• Large value - Fairholme
• Large Blend - Gabelli Asset Fund
• Large Growth - Morgan Stanley Focus Growth A
• Mid Cap value - RidgeWorth Mid-Cap Value Equity A
• Mid Cap Blend - Fidelity Spartan Extended Market Index
• Mid Cap Growth - Waddell & Reed New Concepts A
• Small Cap value - Invesco Van Kampen SmallCapValue Y
• Small Cap blend - T. Rowe Price Small-Cap Stock
• Small Cap Growth - Lord Abbett Developing Growth A
• Real Estate - First American Real Estate Secs A
• Equity Precious Metal - Oppenheimer Gold & Special Minerals A

Usually you will need mutual fund providers as well as brokerage or retirement account (401k account) to buy these mutual funds. Please check the following brokerage/ providers:

• Fidelity – one stop shop for mutual fund or ETF as well as cash management banking
• Vanguard – offer various mutual funds that track indexes as well as ETF for free
• Scottrade – Offer various mutual funds. There are 3,000 No load & No Transaction Fees (NTF) fund for free and 15,000 mutual funds as well as trading account for $7.00 per trade. You can buy the American Fund family for free and please select no load fund.
• Firstrade – Offer mutual funds for $9.99 per trade for no load funds.

Disclosure: I have no affiliation with any of these funds. I also have no position in any of these funds currently. Please do your own research for additional details. Please trade and invest responsibly. Past Performance is No Guarantee of Future Results.