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For beginners who don’t want to risk much, investing in mutual funds under $100 is a great way to get started. Obviously, there are plenty of low-priced stocks but it should be noted that stocks may not always provide investors the diversity that mutual funds assure. Moreover, risks associated with penny stocks are higher. Meanwhile, there are low-cost mutual funds with decent returns where investors can invest as little as $100.
That said, a variety of fund houses offer mutual funds with minimum initial investment amount of $3,000 or higher. For this reason, beginners generally wait to save up for the minimum amount. However, there is always the risk of losing out on returns due to a late start. To counter this cost-hurdle, one must begin by buying low-cost funds.
However, finding mutual funds under $100 can be quite a task. This is because individual investors, who are just starting out, might find it difficult to screen best no-load mutual funds for $100 or less.
Notably, a $100 bet will make more sense when the bulk of the amount is invested and no charges are paid from it. Funds that carry no sales load and have relative low expense ratio should be preferred.
Although Vanguard Investments and Fidelity Investments offer some of the best no-load funds, their minimum initial investments are as high as $3,000 and $2,000, respectively. Beginners are not always fortunate to have a couple of thousand dollars at their disposal.
However, prominent firms such as BlackRock, Inc. and The Charles Schwab Corporation offer several high quality, no-load funds with minimum initial investments of $100 or less. Mutual funds are thus an affordable option for diversity apart from being a safer investment bet.
Why Mutual Funds?
Mutual funds are great options for investors looking for a relatively less risky way to earn at least more than what fixed-income instruments offer. Money from individuals and even organizations are invested in stocks, bonds, or other assets covering diverse industries globally.
One of the benefits of mutual funds is that these allow a small investor to invest in a basket of securities at one go. Investors need not worry about investing a large chunk in securities separately. Moreover, these are less risky than any individual asset class as underperformance of a security gets mitigated by outperformance of others in the portfolio. In addition to asset diversification, mutual funds provide liquidity, economies of scale and are professionally managed.
4 Best Funds to Buy Now
Given such circumstances, we have highlighted four funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that investors should consider. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $100.
We expect these funds to outperform peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
Fidelity Advisor Series Growth Opportunities Fund (FAOFX - Free Report) seeks growth of capital by investing primarily in common stocks. The fund invests in securities of only those companies, which the Fidelity Management & Research Company (FMR) believes have above-average growth potential. FAOFX securities of both U.S. as well as non-U.S. based companies.
This Sector — Large Cap Growth product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 19.3% over the three-year and 14.3% over the five-year benchmarks.
FAOFX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.01%, which is below the category average of 1.05%. Also, the fund carries no sales load.
BlackRock Allocation Target Shares Series M Portfolio (BRAMX - Free Report) fund mostly invests in commercial and residential mortgage-backed securities, derivatives, dollar rolls, asset-backed securities, collateralized mortgage obligations, U.S. Treasury and agency securities, cash equivalent investments, and when-issued and delayed delivery securities. The fund aims for total return, which is consistent with income generation, and apt investment management.
This Sector – Govt Mtge-Intermediate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 3.9% over the three-year and 2.8% over the five-year benchmarks.
BRAMX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.00%, which is below the category average of 0.67%. Also, the fund carries no sales load.
AB Large Cap Growth Fund Class K (ALCKX - Free Report) seeks long-term capital appreciation, and invests in equity securities of a limited number of large, carefully selected, high-quality U.S. companies. The fund normally invests the lion’s share of its assets in common stocks of large-cap companies. However, at times, the fund may invest in shares of exchange-traded funds instead of making direct investments in securities.
This Sector – Large Cap Growth product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and five-year benchmarks are 21.5% and 15.4%, respectively.
ALCKX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.97%, which is below the category average of 1.05%. Also, the fund carries no sales load.
Schwab Balanced Fund (SWOBX - Free Report) seeks capital growth by primarily investing in equity securities and fixed income securities. The fund primarily invests in equity securities of large and mid-cap U.S. companies and investment grade debt instruments.
This Sector – Allocation Balanced product has a history of positive total returns for over 10 years. Specifically, the fund has returned 3.9% over the three-year and 4% over the five-year benchmarks.
SWOBX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.51%, which is below the category average of 0.82%. Also, the fund carries no sales load.
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4 Top Under-$100 Mutual Funds for Your Portfolio
For beginners who don’t want to risk much, investing in mutual funds under $100 is a great way to get started. Obviously, there are plenty of low-priced stocks but it should be noted that stocks may not always provide investors the diversity that mutual funds assure. Moreover, risks associated with penny stocks are higher. Meanwhile, there are low-cost mutual funds with decent returns where investors can invest as little as $100.
That said, a variety of fund houses offer mutual funds with minimum initial investment amount of $3,000 or higher. For this reason, beginners generally wait to save up for the minimum amount. However, there is always the risk of losing out on returns due to a late start. To counter this cost-hurdle, one must begin by buying low-cost funds.
However, finding mutual funds under $100 can be quite a task. This is because individual investors, who are just starting out, might find it difficult to screen best no-load mutual funds for $100 or less.
Notably, a $100 bet will make more sense when the bulk of the amount is invested and no charges are paid from it. Funds that carry no sales load and have relative low expense ratio should be preferred.
Although Vanguard Investments and Fidelity Investments offer some of the best no-load funds, their minimum initial investments are as high as $3,000 and $2,000, respectively. Beginners are not always fortunate to have a couple of thousand dollars at their disposal.
However, prominent firms such as BlackRock, Inc. and The Charles Schwab Corporation offer several high quality, no-load funds with minimum initial investments of $100 or less. Mutual funds are thus an affordable option for diversity apart from being a safer investment bet.
Why Mutual Funds?
Mutual funds are great options for investors looking for a relatively less risky way to earn at least more than what fixed-income instruments offer. Money from individuals and even organizations are invested in stocks, bonds, or other assets covering diverse industries globally.
One of the benefits of mutual funds is that these allow a small investor to invest in a basket of securities at one go. Investors need not worry about investing a large chunk in securities separately. Moreover, these are less risky than any individual asset class as underperformance of a security gets mitigated by outperformance of others in the portfolio. In addition to asset diversification, mutual funds provide liquidity, economies of scale and are professionally managed.
4 Best Funds to Buy Now
Given such circumstances, we have highlighted four funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that investors should consider. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $100.
We expect these funds to outperform peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
Fidelity Advisor Series Growth Opportunities Fund (FAOFX - Free Report) seeks growth of capital by investing primarily in common stocks. The fund invests in securities of only those companies, which the Fidelity Management & Research Company (FMR) believes have above-average growth potential. FAOFX securities of both U.S. as well as non-U.S. based companies.
This Sector — Large Cap Growth product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 19.3% over the three-year and 14.3% over the five-year benchmarks.
FAOFX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.01%, which is below the category average of 1.05%. Also, the fund carries no sales load.
BlackRock Allocation Target Shares Series M Portfolio (BRAMX - Free Report) fund mostly invests in commercial and residential mortgage-backed securities, derivatives, dollar rolls, asset-backed securities, collateralized mortgage obligations, U.S. Treasury and agency securities, cash equivalent investments, and when-issued and delayed delivery securities. The fund aims for total return, which is consistent with income generation, and apt investment management.
This Sector – Govt Mtge-Intermediate product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 3.9% over the three-year and 2.8% over the five-year benchmarks.
BRAMX carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.00%, which is below the category average of 0.67%. Also, the fund carries no sales load.
AB Large Cap Growth Fund Class K (ALCKX - Free Report) seeks long-term capital appreciation, and invests in equity securities of a limited number of large, carefully selected, high-quality U.S. companies. The fund normally invests the lion’s share of its assets in common stocks of large-cap companies. However, at times, the fund may invest in shares of exchange-traded funds instead of making direct investments in securities.
This Sector – Large Cap Growth product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and five-year benchmarks are 21.5% and 15.4%, respectively.
ALCKX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.97%, which is below the category average of 1.05%. Also, the fund carries no sales load.
Schwab Balanced Fund (SWOBX - Free Report) seeks capital growth by primarily investing in equity securities and fixed income securities. The fund primarily invests in equity securities of large and mid-cap U.S. companies and investment grade debt instruments.
This Sector – Allocation Balanced product has a history of positive total returns for over 10 years. Specifically, the fund has returned 3.9% over the three-year and 4% over the five-year benchmarks.
SWOBX carries a Zacks Mutual Fund Rank #2 and has an annual expense ratio of 0.51%, which is below the category average of 0.82%. Also, the fund carries no sales load.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>