Even if you might have paid a hefty commission upfront (and of course taxes along the way) the following 10 mutual funds that we’re going to show you have outpaced the average rise in public college tuition costs over the last 10 years. This is good news for anyone who wants to invest in a mutual fund that they will then use to pay for their child’s college cost when the time comes.
The simple fact is that 10 years ago the tax favored 529 college savings plan wasn’t as popular as it is today and most investors went instead purchased a mutual fund through their financial advisor as well as paying the upfront load on the funds when they were purchased and their taxes on whatever returns they got along the way.
The average 501 mutual fund, over the past 10 years, was able to outpace the 5% increase in public college tuition costs. The 10 mutual funds that we have on this list today however have provided an annual return of 10% or better and, even better, are invested in different areas of the economy as well as domestically and globally, something that is great for an investor who is keen on diversification.
Some people might say that it would be better to have these mutual funds inside of the tax favored 529 college savings plan which as we all know offers tax-free growth of earnings on any distributions that are going to be used for paying the cost of higher education. This would allow the investor to save a lot of money on taxes and have more of that money to use for college costs. While that may be so, the 10 mutual funds that we have here today were not offered by any individual 529 college savings plan. That’s not to say that the 529 plan isn’t a good one but just that the mutual funds that were presenting here today might be better.
So if you’re keen on bucking the 529 trend and want to focus on simply the return on your investment, using the 10 mutual funds below is the way to do it. As is always the case previous performance should not be used as an indicator for future results and indeed in 10 years this list will probably be different as certain sectors of the economy will certainly outperform others.
As an investor you need to choose what is best for you and what best fits your particular approach to investing for not only college costs but also your retirement and other financial needs. When it all boils down to it at the end of the day the thing to look for is the best overall net after-tax return.
Below you’ll find a list of the 10 best mutual funds. We don’t specifically recommend any of them but offer this information as a way to help you make your own decisions and see exactly which mutual funds have given the best return over the last 10 years.
- · Alliance Bernstein Equity Income 11.35%
- · Dreyfus BC Small Midcap Growth 12.14%
- · Fidelity Advisor Consumer Staple 11.80%
- · Invesco International Small Company 17.08%
- · IV: Science & Technology 13.10%
- · MFS International Value 11.34%
- · MFS Utilities 14.51%
- · Nuveen Real Estate 13.30%
- · Prudential Jennison Health Sciences 16.27%
- · Virtus: Emerging Market Opportunity 16.93%