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Investors looking to get a foothold in the markets without going it alone often turn to mutual funds. By pooling money from numerous individuals and investing it across a diversified portfolio of stocks, bonds, or other assets, mutual funds offer an accessible way to participate in financial markets without needing deep expertise.
While mutual funds share similarities with exchange-traded funds (ETFs), they have their own unique rules, benefits, and risks that investors should be aware of. Below, we look at 10 top mutual funds this month, and walk you through the essentials, from how these funds work to how to choose the right one for your goals.
Key Points
• Mutual funds are pooled investment vehicles where multiple investors combine money to purchase diversified asset baskets including stocks, bonds, money-market instruments, and other assets managed by professional teams.
• Mutual fund share prices and performance fluctuate based on economic conditions, inflation, political factors, and underlying asset values within each fund’s specific investment focus or industry sector.
• Evaluating mutual funds requires reviewing the prospectus containing fund holdings, historical performance, associated risks, and expense ratios representing fees paid to professional fund managers for management services.
• Mutual funds provide advantages including built-in diversification across assets, active or passive portfolio management, relative simplicity for passive investors, and accessibility through various investment platforms and brokerages.
• Drawbacks of mutual fund investments include management fees and expense ratios, potential tax liabilities from capital gain distributions, and a passive nature unsuitable for investors preferring active control.
10 Top Mutual Funds
This list includes 10 mutual funds that have at least $1 billion in assets under management (AUM), ranked by market performance as of May 2026. These funds offer exposure to a range of assets, such as information technology, emerging markets, energy, and real estate investments, and may offer insight into the types of funds available.
Keep in mind that this list changes monthly, and past performance is not indicative of future results. It’s important to research any fund you’re considering to determine if it may align with your time horizon, risk tolerance, and portfolio goals.
| Mutual Funds | Ticker | Assets Under Management | Expense Ratio | Dividend Yield | 1-Month Return | 1-Year Return |
|---|---|---|---|---|---|---|
| Vanguard Information Technology Index Fund | VITAX | $19.3 billion | 0.09% | 0.33% | 10.9% | 46.4% |
| Fidelity Emerging Markets Index Fund | FPADX | $14.4 billion | 0.07% | 1.98% | 3.6% | 44.3% |
| Nuveen Emerging Markets Equity Index Fund | TEQLX | $9.6 billion | 0.15% | 2.38% | 3.6% | 44.4% |
| Fidelity SAI Emerging Markets Index Fund | FERGX | $5.0 billion | 0.07% | 2.25% | 3.6% | 43.9% |
| Vanguard Energy Index Fund | VENAX | $2.3 billion | 0.09% | 2.26% | 9.6% | 48.7% |
| Fidelity SAI Small-Mid Cap Momentum Index Fund | FZFLX | $4.3 billion | 0.05% | 0.54% | 3.4% | 41.2% |
| Vanguard Growth Index Fund | VIGRX | $150.9 billion | 0.03% | 0.23% | 6.1% | 26.0% |
| Six Circles Managed Equity Portfolio US Unconstrained Fund | CMEUX | $32.7 billion | 0.06% | 0.88% | 4.7% | 27.4% |
| Northern Emerging Markets Equity Index Fund | NOEMX | $3.0 billion | 0.15% | 2.11% | 3.9% | 45.2% |
| Vanguard Commodity Strategy Fund | VCMDX | $2.6 billion | 0.16% | 12.03% | 6.7% | 41.3% |
Source: Data from SoFi and Bloomberg, as of May 19, 2026. Universe of funds includes U.S.-based, passively managed funds with at least $1B in assets under management (AUM), an expense ratio of 0.2% or lower, a positive price-to-earnings (P/E) ratio, and no leverage. Funds ranked according to their AUM, expense ratio, and a blend of short-term and long-term performance.
Vanguard Information Technology Index Fund (VITAX)
VITAX is an index fund created in 2004 that provides investors exposure to the IT sector of the U.S. stock market — stocks that focus on electronics or computers manufacturing and related industries. In other words, this is a mutual fund for investors looking for exposure to the tech sector. It has an expense ratio of 0.09%.
Fidelity Emerging Markets Index Fund (FPADX)
The Fidelity Emerging Markets Index Fund, trading under the “FPADX” ticker, focuses a majority of its investment strategy in securities in the MSCI Emerging Markets Index, and as such, attempts to give investors broad exposure to emerging stock markets. The fund’s inception was in 2011, and has an expense ratio of 0.075%.
Nuveen Emerging Markets Equity Index Fund (TEQLX)
The Nuveen Emerging Markets Equity Index Fund, trading under the “TEQLX” ticker, invests in a portfolio of emerging market equity investments, according to its management company, Nuveen. The majority of those investments track the MSCI Emerging Markets Index. It has an expense ratio of 0.24%.
Fidelity SAI Emerging Markets Index Fund (FERGX)
The Fidelity SAI Emerging Markets Index Fund, or FERGX, mostly invests in the MSCI Emerging Markets Index, and a majority of its holdings are in the information technology sector. The fund was created in 2016, and has an expense ratio of 0.075%.
Vanguard Energy Index Fund (VENAX)
Vanguard’s Energy Index Fund, trading under the “VENAX” ticker, offers investors exposure to the energy sector, and invests in stocks associated with gas and oil. The fund was created in 2004, has an expense ratio of 0.09%, and has 106 total holdings.
Fidelity SAI Small-Mid Cap Momentum Index Fund (FZFLX)
FZFLX, the ticker under which the Fidelity SAI Small-Mid Cap Momentum Index Fund trades, invests most of its assets in securities included in the Fidelity U.S. Small-Mid Cap Momentum Focus Index. As such, it’s aimed at giving investors exposure to small and mid-sized companies with some sort of “momentum.” It has a an expense ratio of 0.05%.
Vanguard Growth Index Fund (VIGRX)
Vanguard’s Growth Index Fund, trading under the “VIGRX” ticker, has an expense ratio of 0.17%. Notably, the fund is closed to new inventors (as of writing), but seeks to track the performance of the CRSP US Large Cap Growth Index, aiming to capitalize on the appreciation of large U.S. companies.
Six Circles Managed Equity Portfolio US Unconstrained Fund (CMEUX)
The Six Circles Managed Equity Portfolio US Unconstrained Fund, or CMEUX, mostly invests in U.S. stocks, as well as some real estate investments. It has an expense ratio of 0.06%, and comprises nearly $33 billion in assets, as of writing.
Northern Emerging Markets Equity Index Fund (NOEMX)
NOEMX, the ticker symbol for Northern Emerging Markets Equity Index Fund, aims to mimic the performance of the MSCI Emerging Markets Index. Investors may be able to gain exposure to global equities through the fund. It has an expense ratio of 0.15%.
Vanguard Commodity Strategy Fund (VCMDX)
Vanguard’s Commodity Strategy Fund, or VCMDX, is a fund designed to try and give investors a potential hedge against rising prices, and relies on a mix of commodity derivatives and short-term Treasury securities. It has an expense ratio of 0.16%.
What Are Mutual Funds?
A mutual fund is a pooled investment vehicle that collects money from multiple investors to purchase a diversified mix of assets such as stocks, bonds, or money market instruments. In exchange, investors receive shares representing their proportional ownership in the fund.
Each mutual fund is managed according to a specific investment objective, such as growth, income, or capital preservation. A key advantage of mutual funds is diversification. Instead of buying individual securities, investors gain exposure to a broad range of assets in a single investment. This helps reduce risk compared to holding a single stock.
Mutual funds are generally categorized by their management style:
• Actively managed funds: Portfolio managers hand-select investments in an attempt to outperform a specific market benchmark. These funds rely on deep research and strategic decision-making, but often carry higher fees to cover the cost of professional management.
• Passively managed funds: Often called index funds, these aim to replicate the performance of a specific market index (like the S&P 500) rather than beat it. Because they require less oversight, they typically offer lower fees.
Mutual funds are priced using a metric called net asset value (NAV), which represents the per-share value of the fund. NAV is calculated daily by subtracting liabilities from assets and dividing by the number of shares outstanding.
What Impacts the Price of Mutual Funds?
The price of a mutual fund — its NAV — is influenced by several key factors:
• Market performance: The most significant factor is the performance of the underlying assets. If the stocks or bonds held by the fund increase in value, the NAV rises. If they decline, the NAV falls.
• Market conditions and economic factors: Interest rates, inflation, geopolitical events, and overall economic trends influence asset prices, which in turn affect mutual fund values.
• Expenses and fees: Management fees, administrative costs, and other expenses reduce the overall value of a fund’s assets, which can impact the NAV.
• Dividends and capital gains: Mutual funds distribute income such as dividends and capital gains to investors. When distributions are paid, the NAV typically decreases accordingly — even though investors still benefit from the payout.
• Cash flows: Large inflows or outflows (investors buying or redeeming shares) can indirectly impact NAV. For instance, massive redemptions might force a manager to sell securities at unfavorable prices during market downturns, dragging down NAV.
How to Evaluate Mutual Funds
Choosing the right mutual fund requires looking beyond the daily NAV. Below are some key factors to consider:
• Performance history: Review long-term performance by comparing returns against a benchmark (like the S&P 500) and category peers over a five- to ten-year period. Consistency across different market cycles typically matters more than a single year of high gains.
• Expense ratios: This is the annual percentage fee charged to manage the fund. Because these costs are deducted directly from your investment, lower fees generally equate to higher net returns over time. Always compare the expense ratios of similar funds to find the cost-effective options that align with your goals.
• Total return: This offers the most accurate picture of growth by accounting for NAV price changes plus reinvested dividends and capital gains. Evaluating total returns over 1-, 5-, and 10-year periods helps you see how much wealth the fund actually generates for its shareholders.
• Investment objective: Ensure the fund’s strategy aligns with your specific financial goals. Whether you are seeking aggressive long-term growth, steady dividend income, or capital preservation to protect your savings, the fund’s mandate should match your personal risk tolerance and time horizon.
Pros and Cons of Investing in Mutual Funds
Mutual funds come with both benefits and tradeoffs. Here’s a look at how they stock up.
Pros
• Diversification: Mutual funds spread investments across a wide range of assets, reducing the risk that comes from relying on a single stock or bond. This built-in diversification may help smooth out volatility over time.
• Professional management: Actively managed funds are managed by experienced portfolio managers who research markets, select securities, and adjust strategies based on economic conditions — saving investors time and effort.
• Accessibility: Mutual funds are easy to invest in, often requiring low minimum investments. Thai makes them a practical option for beginners and those with limited capital.
• Liquidity: Investors can buy or sell mutual fund shares on any business day, providing relatively easy access to their money compared to some other types of investments.
Cons
• Fees and expenses: Many mutual funds charge expense ratios, management fees, and sales loads, which can eat into overall returns, especially over the long term.
• Limited trading flexibility: Unlike stocks, mutual funds are priced once per day after the market closes, limiting the ability to react to intraday market changes.
• Tax inefficiencies: Mutual funds may distribute capital gains and dividends, which can create unexpected tax liabilities even if you haven’t sold your shares.
• Lack of control: Investors do not have direct control over the specific securities in the fund, as all decisions are made by the fund manager.
How to Invest in Mutual Funds
Getting started with mutual funds doesn’t have to be complicated. You can break down the process into three key steps:
Open an Investment Account
The first step is to open a brokerage account through a reputable financial institution or online investing platform. When comparing providers, look for low transaction fees, a wide selection of funds, and user-friendly research tools. Once your account is active, link your bank to transfer your initial capital.
Choose Your Mutual Funds
Research funds that align with your specific financial goals — whether you’re chasing long-term growth, steady income, or capital preservation. Evaluate each fund’s expense ratio, risk level, and historical performance. To minimize risk, consider diversifying your portfolio across different asset classes and sectors rather than putting all of your savings into a single mutual fund.
Invest and Monitor
Once you’ve selected your funds, you can place your investment order through your brokerage. You may choose to invest a lump sum or contribute regularly through automatic investments. After investing, periodically review your portfolio to ensure it stays aligned with your goals. Over time, you may need to rebalance your investments or adjust your strategy based on changes in your financial situation or market conditions.
Things to Avoid When Investing in Mutual Funds
While investing in mutual funds is relatively easy, there are some pitfalls that can trip up new investors. Here’s a look at some common mistakes to avoid:
• Chasing past performance: It can be tempting to scoop up a fund that recently delivered high returns. But a fund that performed well last year may not repeat its success. A better strategy is to focus on long-term consistency.
• Ignoring fees: High expense ratios and other investment fees can quietly erode your wealth. Because even small percentages compound into significant amounts over time, always compare costs before committing.
• Over-diversification: While diversification is beneficial, owning too many similar funds can dilute returns and complicate your portfolio. Instead, aim for a balanced portfolio with substantial differences between holdings.
• Trying to time the market: Attempting to buy at a “perfect” time is difficult to pull off and can lead to missed opportunities, as well as losses. Consistent investment is generally more effective.
• Not reading the prospectus: The prospectus contains essential information about a fund’s fees, holdings, risks, and investment strategy. Reviewing it can help ensure the fund actually aligns with your goals.
The Takeaway
Mutual funds offer a simple and effective way to build a diversified investment portfolio. They can be especially helpful for investors who want professional guidance and broad market exposure without the complexity of selecting individual securities.
However, there are numerous mutual funds available and they serve different objectives. Understanding how they work, what affects their prices, and how to evaluate them is key for making smart investment decisions. As always, it may be a good idea to consult a professional if you have questions or need guidance.
Invest in what matters most to you with SoFi Active Invest. In a self-directed account provided by SoFi Securities, you can trade stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, options, and more — all while paying $0 commission on every trade. Other fees may apply. Whether you want to trade after-hours or manage your portfolio using real-time stock insights and analyst ratings, you can invest your way in SoFi's easy-to-use mobile app.
FAQ
What are the different types of mutual funds?
There are many types of mutual funds, categorized by their investment objective and the assets they hold. The most common types include:
• Equity mutual funds: These funds primarily invest in stocks, aiming for growth. They can be focused on large-cap, mid-cap, or small-cap companies.
• Bond mutual funds: This type of mutual fund invests in government, municipal, or corporate bonds to generate regular income.
• Balanced mutual funds: These funds hold a mix of stocks and bonds to balance growth and income, often maintaining a fixed allocation.
• Money market mutual funds: Investing in highly liquid, short-term debt instruments, these funds are considered very low-risk.
What fees and expenses should investors be aware of?
Mutual fund investors should be aware of several potential costs. The most important is the expense ratio, an annual fee charged as a percentage of the fund’s assets for management and administrative costs. Additionally, some funds charge a sales load, which is a commission paid when you buy (front-end load) or sell (back-end load) shares. Other potential costs include management fees and 12b-1 fees (for marketing and distribution). Lower fees generally lead to higher net returns over time.
Can I redeem my mutual fund anytime?
Generally, you can redeem or sell your shares in a mutual fund at any time. But there are some specific types of mutual funds that may have lock-in periods or that are close-ended, and selling shares of those funds may result in fees and taxes.
How often is a fund’s price (NAV) updated?
The net asset value (NAV) of a mutual fund is calculated and updated once per business day, after the stock market closes (typically around 4:00 pm EST). All buy and sell orders received during the day are executed at that day’s closing NAV. Unlike stocks or ETFs, mutual funds do not trade throughout the day, so their price remains constant until the next daily calculation.
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INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
Mutual Funds (MFs): Investors should read and carefully consider the information contained in the prospectus, which contains the Mutual Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or SoFi's customer service at: 1.855.456.7634. Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risks. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may have tax implications.
Exchange Traded Funds (ETFs): Before investing in Exchange Traded Funds (ETF), always read the fund's prospectus. It contains important information about the fund’s objectives, risks, and fees. You can get a prospectus from the fund company’s website or by emailing our customer service at [email protected].
Investment Risk: Diversification can help reduce some investment risk, but cannot guarantee profit nor fully protect in a down market.
S&P 500 Index: The S&P 500 Index is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. It is not an investment product, but a measure of U.S. equity performance. Historical performance of the S&P 500 Index does not guarantee similar results in the future. The historical return of the S&P 500 Index shown does not include the reinvestment of dividends or account for investment fees, expenses, or taxes, which would reduce actual returns. Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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