Lopez believes that the securities industry’s rollercoaster ride of 2010 and 2011 has ended and that select mutual funds have been strengthening, posting better returns. He offers three mutual fund picks he believes could bolster investors’ portfolios: a small-cap, a mid-cap growth, and a retirement income fund. He likes this trio because they are no-load funds with very low expense ratios, solid histories, and solid management investment styles.
1 T. Rowe Price Small-Cap Stock Fund (OTCFX) The $7 billion fund, trading at about $35 in August, has performed steadily in weak times and has beaten its benchmark–the S&P 500. Over the past five years, OTCFX has never ranked below the top 10% of the up-to 748 funds that are in its category. Lopez says that the no-load Baltimore-based fund is a 90% domestic stock play, which could make it volatile, but he likes its broad company holdings. He says that the fund’s management doesn’t “focus on one or two major holdings, but has done an excellent job creating an investment that purchases equities in companies that operate in almost every industry sector†including retail, oil and gas, healthcare, consumer, and manufacturing. No single company comprises more than 2% of the fund’s total holdings.
One-year return: 18.07%
Three-year return: 18.90%
Five-year return: 5.64%
Minimum initial investment: $2,500
Fee: 0.92%
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