If you’re looking for the best funds for your money in the next few years, there are several different options available. The Vanguard Wellesley Income fund is a popular choice, while the Total Return Bond is a popular option among investors seeking high growth potential. Some of the newest funds are Dodge & Cox and PGIM, both of which have impressive track records. Which one of these is right for you?
Vanguard Wellesley Income
One reason the Vanguard Wellesley Income is a top mutual fund for 2022 is the portfolio’s attractive credit quality. While many investment grade bond funds rely heavily on bonds in the BBB tier to maximize yield, the Wellesley fund invests only 19% of its assets in that tier. By keeping more than half of its assets in bonds in the A and AAA tiers, the fund can avoid the risk of slipping into the junk category.
The Vanguard Wellesley Income Fund has been on Seeking Alpha before and will turn 50 next year. With a 5-star Morningstar rating, it has performed consistently in the top 1% of its target risk category for over 15 years. The fund’s low fees and conservative approach make it a great choice for those who seek growth but don’t want to risk it.
Vanguard Total Return Bond
If you are looking for a long-term bond fund that is low-cost and offers attractive returns, consider Vanguard Total Return Bond. This ETF holds nearly fifty TIPS. This type of fund can complement core bond holdings in inflationary environments. TIPS has a low expense ratio, but they are vulnerable to inflation. This is why TIPSX bonds are unlikely to outperform the bond market in 2022.
The fund’s asset allocation is fairly conservative, with nearly 80% of its holdings in bonds issued by municipalities. These securities have a BBB or higher credit rating and provide tax-exempt income. Only three percent of its holdings are in unrated issuers, while nearly half of its holdings are AA-rated. In addition, the expense ratio is low, at 0.05%, making it one of the best-valued funds on Wall Street.
PGIM Total Return Bond
The PGIM Total Return Bond is an intermediate-core-plus bond. It invests up to 20% of its assets in high-yield debt. Its portfolio was 14% below investment-grade, but it is yielding a healthy 3.0% today. Its manager has an annualized return of 16.8% over the last 10 years. In addition, it is part of the Kiplinger 25.
Kelley uses quantitative and fundamental analysis to build a diversified portfolio that favors growth-oriented companies. The fund holds a total of 67% in stocks and bonds, which includes a small amount of high-yield debt. It aims to buy attractively priced securities and adheres to strict risk management. The fund has an average turnover of 1.11%. Hence, it is one of the top mutual funds for 2022.
Dodge & Cox
There are two types of mutual funds in the Dodge & Cox portfolio. Dodge & Cox’s bond fund has outperformed the Bloomberg U.S. Aggregate Bond Index since its inception. The bond market is having a tough time in 2022 with rising interest rates, inflation, and an aggressive Federal Reserve. It has also been hit by lingering pandemics and geopolitical conflict.
The Dodge & Cox Stock Fund has a long track record and has outperformed its peers in recent years. It has a low expense ratio for an actively managed equity fund and requires no minimum investment. Morningstar rates the Dodge & Cox Stock Fund as “excellent” overall, but only rates it three stars over the last three years. The Dodge & Cox Income Fund is another highly regarded fund. It has consistently produced alpha, with a very low expense ratio.
Mirae Asset Tax Saver Fund Growth
If you’re looking for a tax-efficient fund to help you accumulate your money, consider the Mirae Asset Tax Saver Fund Growth. This ELSS fund invests in stocks of strong growth companies at modest prices. The fund has no particular theme, but it is unbiased and focuses on companies with strong return ratios and sustainable competitive advantage. This fund follows the traditional growth investing model, which has been gaining popularity over the last few years.
The fund invests in 50-70 stocks of various market caps, with a preference for large-cap companies. Because of its growth investment strategy, it is diversified across sectors, with the majority of assets invested in the finance, FMCG, technology, and energy sectors. The fund has virtually no debt securities, and holds a portion of its AUM in cash for emergencies. This means that if the stock market goes down, the fund will continue to be strong.
SBI Equity Hybrid Fund Growth
SBI Mutual Fund is India’s largest mutual fund house. It has more than 60 different MF schemes across debt, equity, and hybrids. Hybrid funds invest in both equity and debt securities and are based on different asset classes. The best SBI hybrid mutual funds invest in high-growth companies while balancing risk by holding fixed-income securities. Here’s why it’s one of the top mutual funds for 2022:
SBI Equity Hybrid Fund Growth offers both short-term capital appreciation and long-term liquidity with a balance of debt and equities. It has delivered a CAGR of 14.8% since its launch, and is ranked 10 in the Hybrid Equity category. However, it is not for everyone. You can invest a portion of your money in equities, but the rest of your portfolio should be invested in debt.