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3 High-Performing Funds With Fees Around 1%

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Mutual fund investors who aspire to make the most out of their investments with the least amount of fees could focus on funds that offer a low expense ratio.

It’s no doubt prudent to invest in funds with low expense ratios since this is the amount investors are charged in exchange for fund-managing services. An expense ratio comprises operating costs and management fees. Therefore, the lower the expenses, the higher will be the return. Usually, an expense ratio close to 1% is considered ideal.

However, lower expense ratios are a characteristic of passively managed funds. But these funds are not necessarily known for providing higher returns.

This is where actively managed funds mark their entry. First, these funds focus on outperforming the broader markets and so, mutual fund investors can always count on them for higher returns.

Second, actively managed funds can quickly respond to market gyrations. The funds can under weigh the losing stocks and over weigh the gaining ones, thus lowering risks and improving the portfolio’s outcome.

So, wouldn’t it be ideal to invest in funds that have low expense ratios and at the same time are actively managed? It would definitely be a win-win situation for mutual fund investors.

This is why we have considered three mutual funds that offer expense ratios near and about 1% along with solid returns. All these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Additionally, the minimum initial investment is less than $5000. We expect these funds to outperform their peers in the future.

Now we come to the most vital question: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Northern Small Cap Value Fund (NOSGX - Free Report) , a Zacks Mutual Rank #1 (Strong Buy) fund, seeks long-term capital appreciation. It invests the majority of its assets in securities of small-capitalization companies that have good value potential.

As of the last filing, Insight Enterprises, FTI Consulting and Southwest Gas Holdings were the top holdings in NOSGX. The Northern Small Cap Value Fund, managed by Northern Trust, carries an expense ratio of 1.00. Moreover, NOSGX requires a minimal initial investment of $2,500.

NOSGX has a history of strong positive total returns for over 10 years.  Specifically, the fund’s returns over the year-to-date, 3 and 5 year benchmarks are 15.7%, 7.1% and 7.1%, respectively.  To see how this fund performed compared to its category, please click here.  

NOSGX’s performance, as of the last filing, when compared to funds in its category was in the top 69% on a year-to-date basis, top 71% over the past 3 years, and 58% over the past 5 years.

Artisan Global Opportunities Fund Investor Class (ARTRX - Free Report) , a Zacks Mutual Rank #1 fund, seeks capital growth over a long period of time. The fund invests in companies that gain from an accelerating profit cycle and are trading lower than its estimated private market value.

As of the last filing, IHS Markit, Techtronic Industries and AstraZeneca were the top holdings for ARTRX. The Artisan Global Opportunities Fund, managed by Artisan Partners, carries an expense ratio of 1.15. Moreover, ARTRX requires a minimal initial investment of $1,000.

ARTRX has a history of strong positive total returns for over 10 years. Specifically, the fund’s returns over the year-to-date, 3 and 5 year benchmarks are 26%, 13.6%, and 10.9%, respectively.  To see how this fund performed compared to its category, please click here.  

ARTRX’s performance, as of the last filing, when compared to funds in its category was in the top 3% on a year-to-date basis, top 12% over the past 3 years, and 5% over the past 5 years.

Morgan Stanley Institutional Fund, Inc. International Advantage Portfolio Class A (MFAPX - Free Report) , a Zacks Mutual Rank #3 fund, aims for capital appreciation over a long period. The fund invests the majority of its assets in international high-quality established companies that the investment team deems undervalued at the time of buying. The fund looks for long-term growth and sustainable competitive advantages when deciding on where to invest.

The fund offers good exposure to non-U.S. growth stocks. In addition, the fund is heavy on consumer staples, which forms a fifth of its holdings. As of the last filing, DSV A/S, Moncler SpA and Hermes International were the top holdings for MFAPX. The Morgan Stanley Institutional Fund, Inc. International Advantage Portfolio Class A, managed by Morgan Stanley, carries an expense ratio of 1.35.  Moreover, MFAPX requires a minimal initial investment of $1,000.

MFAPX has a history of strong positive total returns for over 10 years.  Specifically, the fund’s returns over the year-to-date, 3, 5 year benchmarks are 18.3%, 15.8%, and 12.4%, respectively. 

MFAPX’s performance, as of the last filing, when compared to funds in its category was in the top 37% on a year-to-date basis, top 4% over the past 3 years, and 2% over the past 5 years.

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