Kiplinger, with the help of BrightScope, a retirement-program data collector that ranks 401(k) plans, has released its list of mutual fund studs and duds found in 401(k) and 403(b) plans.
The pub compiled its list by taking the oldest share class of each fund and clustering the top 100 into six broad categories: large-company stock funds, small- and midsize-company stock funds, foreign and global stock funds, balanced funds, bond funds, and target-date funds. It then analyzed each fund's long-term track record, looking not just at raw results but at each fund's volatility and its performance in difficult markets. It also considered manager tenure and fees, among other things.
In the large company category, the pub named Fidelity Contrafund (FCNTX) as “among the best” because the fund’s portfolio manager, Will Danoff, “has outpaced the market over the long haul — and has done so with below-average volatility.”
Other index funds that were standouts include Total Stock Market Index (VTSMX), 500 Index(VFINX) and Institutional Index (VINIX).
According to the pub, the Vanguard Group and T. Rowe Price funds regularly rank among the top 20% of their target-date fund peer groups over the long haul. Vanguard's target funds typically hold Vanguard index funds, including Total Stock Market and Total Bond while T. Rowe leverages many of its best funds, including New Horizons, in its target funds.
However, Fidelity Freedom funds have lagged their Vanguard and Price counterparts — and in most cases, they have been more volatile, too, according to the pub.
Six bond funds made the top 100 including Fidelity Spartan U.S. Bond Index (FBIDX) andVanguard Total Bond Market Index (VBMFX) and the Vanguard Wellington (VWELX) andVanguard Wellesley Income (VWINX) funds were mentioned among balanced funds as “solid choices.”
On the international front, New Perspective (ANWPX), Dodge & Cox International Stock(DODFX), Harbor International (HAINX) and BlackRock Global Allocation (MDLOX) received kudos because their managers who “tend to buy and hold with a long-term view stood above the rest.”