For those who are beginning their investment journey and 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. On the other hand, there are low-cost mutual funds with decent returns where investors can invest as little as $100.
Furthermore, a variety of fund houses offer mutual funds with a minimum initial investment amount of $3,000 or higher. This is why people generally wait to save 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 cumbersome. 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.
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 small investors to park money in a basket of securities at one go. One 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 the outperformance of others in the portfolio. In addition to asset diversification, mutual funds provide liquidity and 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) that investors should consider. Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $100.
We expect these funds to outperform their 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 Blue Chip Growth Fund Class K ( FBGKX Quick Quote FBGKX - Free Report) aims for capital appreciation in the long term. The fund invests primarily in common stocks of blue-chip companies that have large or medium market capitalizations. FBGKX invests in both U.S. as well as non-U.S. companies.
This Large Cap Growth product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the one and three-year benchmarks are 58.1% and 29%, respectively.
FBGKX has an annual expense ratio of 0.70%, which is below the category average of 0.99%.
Fidelity Select Semiconductors Portfolio ( FSELX Quick Quote FSELX - Free Report) fund aims for capital appreciation. The non-diversified fund invests majority of assets in securities of companies, principally engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment.
This Sector – Tech product has a history of positive total returns for more than 10 years. Specifically, the fund has returned 68.6% over the one-year and 29% over the three-year benchmarks.
FSELX has an annual expense ratio of 0.70%, which is below the category average of 1.04%.
Fidelity Select Utilities Portfolio ( FSUTX Quick Quote FSUTX - Free Report) aims for capital growth. The non-diversified fund invests the majority of its assets in securities of companies primarily engaged in the utilities industry and companies generating most of their revenues from their utility operations. FSUTX invests in U.S. and non-U.S. companies alike.
This Sector-Utilities product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the one and three-year benchmarks are 15.2% and 9.6%, respectively.
FSUTX has an annual expense ratio of 0.76%, which is below the category average of 0.98%.
Fidelity Select Medical Technology and Devices Portfolio ( FSMEX Quick Quote FSMEX - Free Report) fund aims for capital growth. It invests majority of assets in companies that are engaged in activities such as research, manufacturing, supply and sale of medical equipment and related technologies.
This Zacks sector – Health product has a history of positive total returns for more than 10 years. Specifically, the fund’s returns over the one and three-year benchmarks are 35.3% and 22.4%, respectively.
FSMEX has an annual expense ratio of 0.70%, which is below the category average of 1.03%.
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