4 Best Cheap Funds to Invest in Now

Expenses really do matter. As a group, mutual funds with low fees outpace those that charge a lot.

In investing, you really don’t get what you pay for. You could throw a dart blindfolded at a list of low-fee mutual funds and probably do better than you could by investing in a carefully chosen high-priced fund.

Higher-cost funds lag lower-cost funds with remarkable consistency. That’s the conclusion of a recently released study by Morningstar that measured the performance of higher-cost funds against lower-cost funds. A fund’s “expense ratio is the most proven predictor of future returns,” says Russel Kinnel, director of fund research at Morningstar. “Investors should make expense ratios their first or second screen.”

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Steven Goldberg
Contributing Columnist, Kiplinger.com
Steve has been writing for Kiplinger's for more than 25 years. As an associate editor and then senior associate editor, he covered mutual funds for Kiplinger's Personal Finance magazine from 1994-2006. He also authored a book, But Which Mutual Funds? In 2006 he joined with Jerry Tweddell, one of his best sources on investing, to form Tweddell Goldberg Investment Management to manage money for individual investors. Steve continues to write a regular column for Kiplinger.com and enjoys hearing investing questions from readers. You can contact Steve at 301.650.6567 or sgoldberg@kiplinger.com.