Volatility has returned to the stock market, and that's when a seasoned fund manager can really earn his or her keep. Whether it's rising interest rates, trade-war fears or geopolitical instability, a professional investor who's seen both good times and bad is usually a wiser steward of capital.
That's why Kiplinger prefers mutual funds with solid long-term records - and managers with tenures to match. Also, we prefer funds with below-average volatility for their category, and we keep a close eye on a fund's size because a gargantuan asset base makes managing a fund difficult.
And, of course, low operating costs are crucial for our funds - all actively managed - to overcome the biggest advantage of index funds: microscopic expense ratios.
When it comes to investing through volatile markets, these 12 stock funds culled from the list of our favorite low-fee mutual funds all make the grade.
Dodge & Cox Stock
1-year return: 14.6%
3-year return: 11%
5-year return: 13.5%
10-year return: 9.6%
Expense ratio: 0.52%
The focus: Undervalued, well-established midsize and large firms.
The process: Dodge & Cox's nine-member team picks holdings on a company-by-company basis, with an investment horizon of about three to five years. The managers like high-quality businesses that can increase earnings and cash flow over the long term, as well as executives who put profits to work wisely.
The track record: Value-focused stock funds had a tough go of it for some time, at least compared with their growth-oriented peers. The fund's 14.6% gain over the past year lagged the S&P 500's 15.8% return, but it beat 86% of other funds that bet on large, cheap stocks. A low expense ratio of 0.52% helped.
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Copyright 2018 The Kiplinger Washington Editors