Top 5 Best Domestic Equity Stock Mutual Funds 2011

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Intro

With my previous article about top 5 popular best mutual funds, I have decided to write about top 5 domestic equity mutual funds. Mutuals fund can be classified into 2 categories such as bond mutual funds (taxable bond and municipal) and stock mutual funds. Most of equity or stock mutual funds can consist of many different sectors such as domestic equity, International equity, and emerging market mutual funds. Buying a domestic equity mutual fund can be a contrarian view for now. Since most analysts have predicted world growth will come from emerging market area, investing in domestic equity fund can be against most expectation. I don’t think it is a far stretch to invest in US companies. US companies has the history and experience to survive in today difficult market.

Another thing to remember is most of these US companies also have international exposure as well whether it is European market or emerging market such as India, China, Brazil, etc. For example, according to CNBC recent article, company such as McDonald or General Electic has significant international revenue (i.e. non domestic). Though, investing in equity market can be more volatile than bond mutual funds, selecting best mutual funds can help your investment goal. With the stock market drop around 50-80% of value during the crash year 2008-2009, most investor has avoided to invest in equity mutual fund. In this article, I will provide the list and details of the top 5 domestic stock mutual funds by asset according to Morningstar. To no one surprise, the most popular domestic equity mutual fund or stock mutual fund is American Funds Growth Fund of America. Also, two of index funds from Vanguard also landed in the top five of this list.

  1. American Funds Growth Fund of America, AGTHX
  2. Vanguard Total Stock Market, VTSMX
  3. Vanguard 500 Index Fund, VFINX
  4. Fidelity Contrafund, FCNTX
  5. American Funds Investment Company of America, AIVSX
If you are interested in bond fund, please check my article taxable bond fund and municipal bond fund.

(click column header to sort results)
No  
Type  
Fund  
Ticker  
Category  
Provider  
Assets (Bil)  
Expense Ratio  
Annual Turnover  
Min. Invest  
Beta  
Load  
Morningstar rating  
1
Stock
American Funds Growth Fund of America
AGTHX
Large Growth
American Funds
148
0.75%
38%
$250
0.98
Yes
3
2
Stock
Vanguard Total Stock Market
VTSMX
Large Blend
Vanguard
131
0.18%
5%
$3,000
1.03
No
3
3
Stock
Vanguard 500 Index
VFINX
Large Blend
Vanguard
86
0.18%
12%
$3,000
1
No
3
4
Stock
Fidelity Contrafund
FCNTX
Large Growth
Fidelity
68
1.01%
58%
$2,500
0.88
No
5
5
Stock
American Funds Inv Co of America
AIVSX
Large Blend
American Funds
54
0.66%
28%
$250
0.91
Yes
3
Growth Fund of America holding breakdown
Growth Fund of America holding breakdown

1. American Funds Growth Fund of America

As one of the biggest asset mutual fund, no one will surprise with the popularity of this American Fund. The fund objective is to provide growth of capital. It also can invest wherever the best growth opportunities may be (about >65% in common stocks & < 25% foreign stocks). This fund also is being offered in various classes for individual investor or institutional. If you choose this fund, please note that some fund classes may have a front end sales load of 5.75%. The fund is managed by James E. Drasdo, lead manager and by portfolio counselors such as Donnalisa P. Barnum, Gordon Crawford, James F. Rothenberg, Gregg E. Ireland et all. This mutual fund also known as growth stock mutual fund which meant the fund will invest in company with best growth prospect.

The fund performance is as follows (AGTHX):

1 Year: 7.79% per year

3 Year: -6.72% per year

5 Year: 1.53% per year

10 Year: 0.82% per year

Note: This return is an annualized return with no sales charge.

This fund is also offered in most IRA, 401K fund, and 529 account selection. Some asset classes of fund have lower expense ratio fee, and no front end sales charge fee. Other tickers of American Funds Growth Fund of America fund are:  CGFAX, AGRBX, CGFBX, CGFCX, GFACX, RGAGX, GFAFX, CGFFX, CGFEX, RGAFX, RGACX, RGXAX, RGABX, and RGAEX. For instance, RGAGX has only 0.14% expense ratio and no front end sales load. The expense ratio of different classes of fund can range from 0.14% to 1.57%.

As discussed before, the primary fund portfolio consists of growth stocks. The top 3 sectors of fund as June 2010 are Oil & Gas energy sector, software technology sector and Metal & mining sector. Top 10 largest equity holdings for this fund include Google, Oracle, Microsoft, Apple, JP Morgan Chase, Barrick Gold, Cisco systems, Union Pacific, Apache, and Suncor. 

Vanguard Total St Market Equity Characteristic
Vanguard Total St Market Equity Characteristic

2. Vanguard Total Stock Market Fund

Vanguard is very popular in cost conscious investor. As one of the lowest expense cost mutual fund provider, vanguard has become the leader of mutual fund in term of asset. The Vanguard Total Stock Market fund seeks to track the performance of a benchmark index that measures the investment return of the overall stock market in US stock market (MSCI US Broad Market Index). The fund Invests in more than 3,000 stocks representative of the whole U.S. market. As Typical Vanguard fund, Vanguard Total Stock Market also has a low expense ratio. As a conscious investor, low expense ratio can be a good thing in a long term investment strategy; this means more return for us the investor. The fund is being managed passively by Gerard C. O’Reilly. As typical vanguard fund, this is a no load mutual fund as well.

This fund is also offered in most IRA, 401K fund, and 529 account selection. Some asset classes of fund have lower expense ratio fee, and no front end sales charge fee. Other tickers of Vanguard Total Stock Marketare: VITSX, VTSAX, and VTSSX. For instance, VITSX has only 0.06% expense ratio. The expense ratio of different classes of fund can range from 0.06% to 0.18%.

The primary portfolio consists of large cap blend stocks. The top 3 sectors of fund as August 2010 are Technology, Financial and Healthcare sector. Top 10 largest equity holdings for this fund include Exxon Mobil, Apple, Microsoft, General Electric, Procter & Gamble, International Business Machines (IBM), Johnson & Johnson, JP Morgan Chase, AT&T and Chevron.

Vanguard 500 Index Product Summary
Vanguard 500 Index Product Summary

3. Vanguard 500 Index Fund

I am not surprise to see another Vanguard mutual fund in this list. Vanguard 500 Index fundis another vanguard mutual fund offering which tracks S&P 500 index. The investment objective is to track the performance of a benchmark index that measures the investment return of large-capitalization stocks (i.e. large company). As typical vanguard fund, this mutual fund is also a passive management or indexing investment approach designed to track the performance of the Standard & Poor’s 500 Index, which is a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. The fund is being managed passively by Michael H. Buek. This is one of no load mutual fund.

This fund is also offered in most IRA, 401K fund, and 529 account selection. Some asset classes of fund have lower expense ratio fee, and no front end sales charge fee. Other tickers of Vanguard 500 Index fundare: VFIAX and VIFSX. For instance, VFIAX and VIFSX have only 0.07% expense ratio and no front end sales load. The expense ratio of different classes of fund can range from 0.07% to 0.18%.

The primary portfolio consists of large cap blend stocks. The top 3 sectors of fund as August 2010 are Technology, Financial and Healthcare sector. Top 10 largest equity holdings for this fund include Exxon Mobil, Apple, Microsoft, General Electric (GE), Johnson & Johnson (JNJ), Procter & Gamble, International Business Machines (IBM), AT&T, Chevron and  JP Morgan Chase.

Fidelity Contrafund Composition
Fidelity Contrafund Composition

4. Fidelity Contrafund Fund

This Fidelity Contrafund is previously closed to investor, however due to financial crisis it has reopened for new investor since late 2008. This is the only one that have 5 stars in Morningstar rating. The fund has been a consistent performer through the years. The fund has invested heavily on blue-chip (i.e. large cap) household names. This is indicative of the defensive strategy it assumed during the downturn. The strategy helped the fund minimize losses as the market bottomed, but it also capped returns when riskier parts of equity markets flourished in 2009. The fund is managed by William Danoff since 1990. There is no sales load for this mutual fund.

This fund is also offered in most IRA, 401K fund, and 529 account selection. There is only another asset class of Fidelity Contrafund Fund, FCNKX. This FCNKX fund has lower expense ratio of 0.85%.

The primary portfolio consists of large cap growth stocks. The top 3 sectors of fund as October 2010 are Technology, Consumer Discretionary and Financial sector. Top 10 largest equity holdings contribute to 29% asset for this fund are Apple, Google, Berkshire Hathaway, McDonalds, Wells Fargo, Coca-Cola, Disney, Visa, Nike, and Noble Energy.

Investment Company of America Holding Mix
Investment Company of America Holding Mix

5. American Funds Investment Company of America

The fund’s investment objectives are to achieve long-term growth of capital and income. It emphasizes investments in well-established blue chip companies, representing a wide cross section of the U.S. economy. Its portfolio consists primarily of stocks, many of which are dividend paying. This income-oriented fund also maintains a diversified portfolio. This fund also is being offered in various classes for individual investor or institutional. If you choose this fund, please note that some fund classes may have a front end sales load of 5.75%. The lead manager of this American Funds is R. Michael Shanahan since 1991.

This fund is also offered in most IRA, 401K fund, and 529 account selection. Some asset classes of fund have lower expense ratio fee, and no front end sales charge fee. Other tickers of American Funds Growth Fund of America fund are: CICAX, CICBX, AICBX, AICCX, CICCX, CICEX, AICFX, RICGX, CICFX, ICAFX, RICBX, RICFX, RICCX, RICEX and RICAX. For instance, RICGX has only 0.33% expense ratio and no front end sales load. The expense ratio of different classes of fund can range from 0.33% to 1.53%.

The primary portfolio consists of large cap blend stocks. The top 3 sectors of fund as October 2010 are Energy, Consumer Discretionary and Technology sector. Top 10 largest equity holdings contribute to 27% asset for this fund are AT&T, Microsoft, Philip Morris International, Oracle, Merck, Royal Dutch Shell, Google, ConocoPhillips, Hewlett-Packard (HP), and Banco Santander.

 

Where can I buy mutual funds?

Usually you will need mutual fund providers as well as brokerage to buy mutual funds. Most brokerage may offer these mutual funds. Please check the following providers:

1. Fidelity – one stop shop for mutual fund or ETF as well as cash management banking

2. Vanguard – offer various mutual funds that track indexes as well as ETF for free

3. T. Rowe Price – only offer their fund & famous for 401k administrator for most company

4. Scottrade – Offer various mutual funds. 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.

5. Etrade – Offer various mutual funds as well as trading account

6. Zecco – Offer various no load mutual funds for $10.00 as well as broker trading account with free 10 trades per month with >$25k balance.

 

Disclosure:

I have no affiliation with any of these mutual funds. I do have position in Vanguard S&P 500 index fund in my 401k account. I may buy and sell at any time. Please do your own research for additional details. Please trade and invest responsibly. Past Performance is No Guarantee of Future Results

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Comments 5 comments

LillyGrillzit profile image

LillyGrillzit 6 years ago from The River Valley, Arkansas

Excellent Investing Hub! Good Disclaimer! I enjoy reading your tips. I know you are on solid ground, because Suse Orman promotes the same Mutual Funds. Thank you for sharing.


chan0512 profile image

chan0512 6 years ago from Camarillo, CA Author

Thanks Lilly. Glad I can help! :)


dev4life profile image

dev4life 6 years ago from Anywhere, USA

It is good information regarding mutual funds. I think need it always great for people to provide information that will help people who are just learning to invest his or her money. Good Hub.


chan0512 profile image

chan0512 6 years ago from Camarillo, CA Author

Thanks Dev4life! Glad you like the article. I'll write more hub about mutual funds. I think it is a great way to provide unbiased information about mutual fund. Most article in magazine is slightly bias toward some mutual funds and investor can't distinguish the good or bad. I have seen one magazine which promote certain mutual fund and loss big during the crash year.


TradingStocks profile image

TradingStocks 6 years ago

Thanks for this great resource of where to find good mutual funds. They are a passive investment so is good if you don't want to trade all the time. The key is to find a high return one that is consistent too!

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