T Rowe Price Blue Chip Growth Fund the Annual Operating Expenses in Dollars for 1000 Invested
The Kiplinger 25 list of our favorite no-load mutual funds dates back to 2004, and our coverage of mutual funds goes all the way back to the 1950s. We believe in holding funds rather than trading them, so we focus on promising mutual funds with solid long-term records – and managers with tenures to match.
This year, we're making two changes to the Kip 25 roster. We are adding a bank-loan fund, T. Rowe Price Floating Rate (PRFRX), to hedge against a rise in interest rates. Bond prices and interest rates tend to move in opposite directions, but the kind of debt that this fund buys comes with coupon rates that adjust every three months in step with a short-term benchmark.
To make room for it, we're taking out DoubleLine Total Return Bond (DLTNX). We respect manager Jeffrey Gundlach and this fund's strategy, and you should hold on to shares if you already own them. But Total Return Bond was one of three core bond funds in the Kip 25, and its strategy is less diversified across bond sectors than the other two. Bond funds face challenging times ahead, but something is always working, and a nimbler strategy may be better in the near term.
To address rising inflation, we're adding TCW Enhanced Commodity Strategy (TGABX), which aims to beat an index that tracks a basket of commodities, including copper and cotton. Although we believe inflation will calm down from its recent spike to 7.9%, it will likely settle at a higher rate than it has been in recent years. Kiplinger forecasts an inflation rate of 6.5% at year's end.
To make room for the fund, Vanguard Wellington (VWELX), a balanced fund that has undergone a shift in key managers in recent years, is coming out.
Here are our picks for the best 25 low-fee mutual funds: what makes them tick, and what kind of returns they've delivered.
Data is as of March 24, unless otherwise noted. Three-, five- and 10-year returns are annualized. Yields on equity funds represent the trailing 12-month yield. Yields on balanced and bond funds are SEC yields, which reflect the interest earned after deducting fund expenses for the most recent 30-day period.
Dodge & Cox Stock
- Symbol: DODGX
- 1-year return: 18.4%
- 3-year return: 18.0%
- 5-year return: 13.9%
- 10-year return: 14.4%
- Yield: 1.2%
- Expense ratio: 0.52%
The focus: A contrarian approach to investing in bargain-priced stocks of medium-to-large U.S. companies.
The process: The managers are disciplined about buying low and selling high. As healthcare and communication services shares dropped in 2021, the managers added to stakes in those sectors, including Gilead Sciences (GILD) and Comcast (CMCSA). And as financial stocks climbed last year, they booked profits in American Express (AXP) and Bank of America (BAC) and sold shares outright in JPMorgan Chase (JPM), to name a few.
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The track record: Value-style investing was out of favor for much of the past decade, so the fund's 10-year record lags the S&P 500's. But the fund has returned 18.4% over the past year, ahead of the index by about two percentage points.
The last word: The managers' contrarian approach takes patience because it makes the fund prone to stretches of up and down returns. But shareholders who held on have been rewarded over the long haul. The fund's 20-year annualized return of 9.3% beat the S&P 500, which returned 9.0%.
Fidelity Blue Chip Growth
- Symbol: FBGRX
- 1-year return: 7.8%
- 3-year return: 26.5%
- 5-year return: 23.9%
- 10-year return: 18.7%
- Yield: 0.0%
- Expense ratio: 0.79%
The focus: Well-established, well-capitalized, medium-to-large companies with above-average growth.
The process: Manager Sonu Kalra finds good prospects that usually fall into one of three categories: companies with robust long-term growth prospects, economically sensitive firms poised to take off, and businesses with a new manager or product that will fuel growth.
The track record: The fund's one-year return is modest after a sell-off in tech-related holdings, including ride-share operator Lyft (LYFT) and social-media firm Snap (SNAP). The fund's 10-year annualized return beat 96% of its peers and the S&P 500.
The last word: Best for long-term investors who have the time to ride out the volatility. No other Kiplinger 25 stock fund has a better risk-adjusted return.
Mairs & Power Growth
- Symbol: MPGFX
- 1-year return: 14.5%
- 3-year return: 17.5%
- 5-year return: 14.0%
- 10-year return: 13.6%
- Yield: 0.6%
- Expense ratio: 0.64%
The focus: Growing companies of any size trading at reasonable prices.
The process: More than half of the fund's holdings are based in the Upper Midwest. Meeting with company executives matters to Growth's St. Paul-based managers, so proximity helps.
The track record: The fund doesn't hold energy stocks, the top sector in the S&P 500 over the past 12 months. That hurt recent results, as did the fund's outsize, 11% stake in small companies, an asset class that struggled in the second half of 2021. The fund's 14.5% one-year return lagged the S&P 500.
The last word: Because one-third of the portfolio holds stocks in smaller firms, this all-cap fund has lagged large-cap stock funds. But it beat the Russell Midcap Index and the Russell 2000 small-company index over the past one-, three-, five- and 10-year periods.
Primecap Odyssey Growth
- Symbol: POGRX
- 1-year return: 5.0%
- 3-year return: 13.6%
- 5-year return: 13.9%
- 10-year return: 14.8%
- Yield: 0.1%
- Expense ratio: 0.65%
The focus: Companies of any size with long-term growth potential.
The process: The fund's five managers divide the fund's assets and run a portion independently. They favor firms with above-average growth prospects or a catalyst for growth – such as a new product, new management, a restructuring, or a structural shift in demand or supply – that isn't reflected in stock prices when they buy.
The track record: Over the long haul, this approach has delivered stunning results. But the fund's recent performance has been disappointing as growth stocks fell out of favor. The fund's stakes in biotech and Chinese tech firms were a drag, too.
The last word: Don't count these master stock pickers out.
T. Rowe Price Dividend Growth
- Symbol: PRDGX
- 1-year return: 15.9%
- 3-year return: 16.9%
- 5-year return: 15.0%
- 10-year return: 14.0%
- Yield: 0.8%
- Expense ratio: 0.63%
The focus: Stocks in high-quality, large companies that are expected to raise dividends. The fund yields 0.83%.
The process: Manager Tom Huber favors companies with strong earnings and cash flow that can control costs and still enjoy solid revenue growth. The fund's top three sectors are technology, healthcare and financials.
The track record: Its five-year annualized return, 15.0%, lagged the S&P 500, which returned 16.1%. But the fund's one-year record outpaced the broad-market stock index.
The last word: Don't expect go-go returns; the fund's focus on firms with durable earnings and cash flow allows it to hold up better in times of stress.
Vanguard Equity-Income
- Symbol: VEIPX
- 1-year return: 18.1%
- 3-year return: 14.3%
- 10-year return: 12.5%
- Yield: 2.3%
- Expense ratio: 0.28%
The focus: High-yield dividend stocks. The fund yields 2.31%.
The process: Wellington Management runs two-thirds of the assets, focusing on firms with competitive advantages that can sustain and increase payouts. Vanguard's quantitative stock-picking group runs the rest, using algorithms to find high-dividend-yield stocks with solid balance sheets and stable earnings growth, among other things.
The track record: The fund has posted peer-beating returns with below-average volatility over the past decade. Longtime Wellington manager Michael Reckmeyer is retiring in June. Shifts on the Vanguard side are less concerning because the quant measures used to pick stocks don't change.
The last word: Matthew Hand, an analyst with the fund since 2004, has been groomed to take over for Reckmeyer since 2018. Nonetheless, we're on high alert with this fund.
DF Dent Midcap Growth
- Symbol: DFDMX
- 1-year return: -0.3%
- 3-year return: 14.9%
- 5-year return: 17.0%
- 10-year return: 14.2%
- Yield: 0.00%
- Expense ratio: 0.98%
The focus: High-quality, growing midsize companies.
The process: The managers view themselves as owners of businesses, not owners of stocks. They find growth companies with leading roles in their industry, durable growth potential, a history of profitability and trustworthy executives. Because stocks must pass a high threshold to enter the fund, the managers are likely to hold or add to positions during periods of short-term weakness, as they did in late 2021 with shares in tech holdings Guidewire Software (GWRE) and CrowdStrike (CRWD).
The track record: The fund trailed peers, mid-cap growth funds, in 2021, but its five-year record beat its peers and the Russell Midcap index.
The last word: DF Dent Midcap Growth will shine again, thanks to its smart, disciplined management.
Parnassus Mid Cap
- Symbol: PARMX
- 1-year return: 3.1%
- 3-year return: 10.3%
- 5-year return: 9.6%
- 10-year return: 11.2%
- Yield: 0.0%
- Expense ratio: 0.98%
The focus: Midsize companies that pass environmental, social and governance (ESG) measures. The fund is fossil-fuel-free.
The process: Matt Gershuny and Lori Keith work with five analysts to find high-quality businesses with a competitive advantage.
The track record: The year 2021 was "one of the toughest we've ever had," says Gershuny. Not holding energy, the best-performing sector over the past 12 months, was a drag. The fund's one-year return was 3.1%; the Russell Midcap index gained 9.3%.
The last word: Gershuny says the fund tends to shine in down markets, lag in up markets but outperform over full market cycles. The bull run of the past decade has left the fund a little flat-footed. Since the managers took over in 2008, Parnassus Mid Cap has returned 11.2% annualized, which trails the Russell Midcap Index but beats the 10.2% annualized return of the typical mid-cap blend fund. With bouts of market weakness likely to color this year, we're watching the fund closely. If it doesn't thrive, it may get the boot.
T. Rowe Price QM U.S. Small-Cap Growth
- Symbol: PRDSX
- 1-year return: -1.7%
- 3-year return: 12.5%
- 5-year return: 12.0%
- 10-year return: 12.6%
- Yield: 0.00%
- Expense ratio: 0.78%
The focus: Small, growing companies.
The process: Computer models designed by manager Sudhir Nanda find reasonably priced growing companies with steady earnings and revenues. Casella Waste Systems (CWST), a waste management company, and TopBuild (BLD), a building materials installer and distributor, are top holdings.
The track record: QM U.S. Small Growth Equity beat the Russell 2000 small-cap index over the past one, three, five and 10 years.
The last word: Compared with its small growth fund peers, QM U.S. Small Growth Equity boasts low volatility.
T. Rowe Price Small-Cap Value
- Symbol: PRSVX
- 1-year return: 6.8%
- 3-year return: 14.6%
- 5-year return: 10.9%
- 10-year return: 11.2%
- Yield: 0.3%
- Expense ratio: 0.80%
The focus: Unloved small companies.
The process: Fundamental research that favors value-priced shares in profitable companies with stable balance sheets.
The track record: Despite some wobbles when he took the helm in 2014, manager David Wagner has beaten the Russell 2000 since he stepped in. The fund's high-quality tilt is a plus lately. Over the past 12 months, the fund posted a 6.8% gain, which trounced the 1.7% loss in the Russell 2000.
The last word: The fund offers a durable small-cap strategy.
Baron Emerging Markets
- Symbol: BEXFX
- 1-year return: -16.6%
- 3-year return: 4.0%
- 5-year return: 4.6%
- 10-year return: 5.3%
- Yield: 1.8%
- Expense ratio: 1.4%
The focus: Developing-country stocks.
The process: Manager Michael Kass invests with growth themes in mind, such as the potential for Chinese companies to take market share from foreign multi-national firms and the rise of emerging-markets consumers. Taiwan Semiconductor Manufacturing (TSM) and Tencent Holdings (TCEHY) are top holdings; China and India stocks account for 60% of assets.
The track record: Uncertainty in China, Russia and Brazil weighed on emerging-markets stocks over the past 12 months, and the fund lost 16.6% for the period. But its 10-year annualized return, 5.3%, beat 87% of its peers and the MSCI Emerging Markets Index.
The last word: At the end of 2021, emerging-markets stocks traded at a 20-year low relative to U.S. stocks, measured by price-earnings ratios. But Kass is optimistic: "We are likely exiting a long cycle of underperformance."
Brown Capital Management International Small Company
- Symbol: BCSVX
- 1-year return: -7.0%
- 3-year return: 12.6%
- 5-year return: 15.3%
- 10-year return: --
- Yield: 0.0%
- Expense ratio: 1.33%
The focus: Small and midsize foreign companies in developed countries.
The process: Four managers invest in firms that boast solid revenue and earnings growth, a competitive, sustainable position in their industry and agile executives with a vision of the future and an ability to deliver on it. About 40 stocks fill the portfolio.
The track record: The fund has cooled off in recent months, due in part to stakes in tech and healthcare stocks, which are in retreat. It has lost 7% over the past year, lagging peers (foreign small and midsize growth funds). But its robust five-year record stands among the top 3% of the category.
The last word: The fund's recent performance is a reminder of the risks that come with investing in small foreign stocks. Rather than a main-dish holding, this fund should be considered more of a sauce on the side.
Fidelity International Growth
- Symbol: FIGFX
- 1-year return: 2.1%
- 3-year return: 12.3%
- 5-year return: 10.5%
- 10-year return: 8.6%
- Yield: 0.5%
- Expense ratio: 0.99%
The focus: Foreign companies with multiyear growth prospects.
The process: Manager Jed Weiss likes to invest in firms with durable industry niches at attractive prices relative to his earnings forecasts. ASML Holding (ASML) and Nestlé (NSRGY) are top holdings.
The track record: A load of recent worries pulled foreign stocks down, including the invasion of Ukraine, inflation and the omicron COVID-19 variant. But the fund's 12-month record still leads its peers and the EAFE Index. And over the past decade, its 8.6% annualized return beat 88% of its peers and the EAFE's 5.5% annualized gain.
The last word: Weiss likes firms with pricing power – they can raise prices for goods or services without demand slipping. That has helped deliver above-average returns consistently, with below-average volatility, boding well for the year ahead.
Janus Henderson Global Equity Income
- Symbol: HFQTX
- 1-year return: 8.0%
- 3-year return: 7.9%
- 5-year return: 6.0%*
- 10-year return: 6.3%*
- Yield: 7.2%
- Expense ratio: 0.94%
The focus: Dividend-paying foreign stocks trading at discount prices.
The process: The fund has a global approach, which the managers say allows them to take advantage of different economic environments. Roughly 20% of the fund is invested in U.S. stocks, but none of them are among the fund's top 10 holdings. The ideal company has strong, growing levels of free cash flow (money left over after expenses to maintain the business), underappreciated earnings, and the ability to sustain dividend payouts.
The track record: Dividend stocks were out of favor for much of the past 12 months, but the fund's one-year return of 4.3% outpaced 87% of its peers (foreign large value funds).
The last word: The fund's income focus helps lower volatility.
*Returns as of Feb. 28, 2022. (Morningstar did not have current data available.)
Fidelity Select Health Care
- Symbol: FSPHX
- 1-year return: 1.2%
- 3-year return: 14.6%
- 5-year return: 14.6%
- 10-year return: 17.0%
- Yield: 0.1%
- Expense ratio: 0.69%
The focus: Healthcare stocks.
The process: Longtime manager Eddie Yoon builds a diversified portfolio of high-quality companies with stable earnings and emerging companies with innovative new products.
The track record: Healthcare stocks were largely left behind in the economic "reopening narrative" of 2021, says Yoon. Shares in biotech and healthcare equipment – among the fund's biggest subindustry exposures – turned in the worst performances of the sector over the past 12 months. Select Health Care lost 1.0%. That beats its peer funds, but lags the 13.7% gain in its benchmark, the MSCI USA IMI Health Care 25-50 Index.
The last word: Yoon has run Select Health Care since 2008, and his 10-year annualized return, 16.7%, ranks in the top 10% of all healthcare funds.
T. Rowe Price Global Technology
- Symbol: PRGTX
- 1-year return: -15.4%
- 3-year return: 17.2%
- 5-year return: 17.3%
- 10-year return: 18.8%
- Yield: 0.0%
- Expense ratio: 0.86%
The focus: Tech companies.
The process: Manager Alan Tu favors small companies, which he says offer bigger upside potential. The fund holds mostly U.S. stocks. Atlassian (TEAM) and Hubspot (HUBS) are its biggest holdings.
The track record: The recent sell-off in tech and small stocks has walloped the fund. Over the past 12 months, it has lost 15.4%. Software stocks, which make up more than half of the fund, got hit the hardest, and that has cast a long shadow. The fund's three-year annualized return, which had been better than the returns of its peers, now lags.
The last word: Stick it out, but make sure you have the tolerance and time for the ride. The fund is open to new investors; you can buy directly from Price. But at Schwab, investors new to the fund must call a broker to buy shares for the first time.
TCW Enhanced Commodity Strategy
- Symbol: TGABX
- 1-year return: 53.9%
- 3-year return: 19.5%
- 5-year return: 11.7%
- 10-year return: 1.3%
- Yield: 5.5%
- Expense ratio: 0.75%
The focus: Raw materials or goods, including soybeans, corn, gold and oil.
The process: The fund seeks to outpace a broad commodity index by balancing derivative contracts linked to the future returns of the Bloomberg Commodity Index with a bond portfolio of mostly high-quality corporate, mortgage-backed and Treasury debt.
The track record: Over the past three years, the fund's 19.5% annualized return ranked among the top 83% of its peers (broad-basket commodities funds), and it beat the Bloomberg Commodity Index by an average of 2.5 percentage points per year.
The last word: Consider the fund for a small, tactical position (2% to 5%) in your portfolio to hedge inflation. It's not a buy-and-hold-forever fund, although commodities are in an uptrend that could last several years. TCW Enhanced Commodity Strategy outpaced the commodity index and its peer funds over the past decade, but its 10-year annualized return is a flat 1.3%.
Fidelity Intermediate Municipal Income
- Symbol: FLTMX
- 1-year return: -3.5%
- 3-year return: 1.6%
- 5-year return: 2.3%
- 10-year return: 2.4%
- Yield: 1.3%
- Expense ratio: 0.32%
The focus: High-quality debt issued by states and counties that is exempt from federal income tax. The fund yields 1.3%, a tax-equivalent payout of 1.67% for taxpayers in the 24% marginal tax bracket. The fund's duration (a measure of interest-rate sensitivity) is 4.2 years, implying a drop of 4.2% in net asset value if rates rise one percentage point over a one-year period.
The process: Three managers weave research of individual securities with analysis of where long- and short-term interest rates are headed, keeping an eye on interest-rate risk, to build a portfolio of diversified, medium-maturity municipal debt.
The track record: A series of manager shifts began in late 2018 and ended in early 2021, so a proper time frame within which to review the new managers' performance is hard to pin down. The fund's one-year return beat 41% of its peers.
The last word: Below-average volatility makes up for middling returns. The fund tends to shine in downturns.
Fidelity Strategic Income
- Symbol: FADMX
- 1-year return: -1.6%
- 3-year return: 3.8%
- 5-year return: 4.2%*
- 10-year return: 4.0%*
- Yield: 2.7%
- Expense ratio: 0.66%
The focus: A mix of high- and low-quality bonds expected to deliver high income. The fund's duration is 4.5 years.
The process: The fund invests across multiple sectors, with a target allocation of 45% of assets in high-yield bonds, 25% in U.S. government and investment-grade issues, 15% in emerging-markets debt, and 15% in IOUs from developed foreign countries.
The track record: Relative to its category (multisector bond funds), Strategic Income sports above-average returns and below-average volatility. Over the past three years, its 3.8% annualized return beat 82% of its peers.
The last word: Its chunk of junk debt makes the fund best positioned as a secondary holding in a bond portfolio.
*Returns as of Feb. 28, 2022. (Morningstar did not have current data available.)
Metropolitan West Total Return
- Symbol: MWTRX
- 1-year return: -5.1%
- 3-year return: 2.1%
- 5-year return: 2.3%
- 10-year return: 2.9%
- Yield: 1.6%
- Expense ratio: 0.67%
The focus: Investment-grade (triple-A to triple-B), medium-maturity bonds. The fund's duration is 6.3 years.
The process: Three bargain-minded managers buy low and sell high. The fund currently holds a mix of mostly Treasuries (34% of assets), corporate bonds (23%), and mortgage- and asset-backed securities (37%). Cash and a small stake in muni bonds fill the rest of the portfolio. After scooping up beaten-down corporate debt and government-guaranteed mortgage bonds during the pandemic bear market, the fund is now defensively positioned.
The track record: The fund's five-year annualized return beat the Bloomberg U.S. Aggregate Bond Index.
The last word: This core-plus bond fund can hold up to 20% of assets in junk-rated debt, but it's a solid core holding in a bond portfolio.
T. Rowe Price Floating Rate
- Symbol: PRFRX
- 1-year return: 2.3%
- 3-year return: 3.3%
- 5-year return: 3.3%
- 10-year return: 3.6%
- Yield: 3.2%
- Expense ratio: 0.76%
The focus: Medium-term loans paying interest rates that reset every three months in line with a short-term benchmark. The fund yields 3% and has a duration of 0.4 years.
The process: Longtime manager Paul Massaro leads 17 analysts in researching floating-rate loans. These securities, sometimes called bank loans or leveraged loans, are issued by banks and financial firms to companies with credit ratings that fall below investment grade.
The track record: Price Floating Rate boasts higher risk-adjusted returns and lower volatility than the average bank-loan fund. Over the past three years, the fund beat 75% of its peers and was 11% less volatile than the average bank-loan fund. What's more, the fund's long-term default rate – unpaid loans are a key risk with bank loans – is 0.1%, far below the typical 2.5%-to-3.0% default rates of the broad floating-rate loan market.
The last word: Rising interest rates make this asset class attractive. But bank loans work in other market environments, too, says Massaro. "Loans have provided positive returns in 24 of the past 25 years," he says. Bank loans are typically less volatile than other junk debt, and they tend to zig when other bond assets zag. "They're good bond portfolio diversifiers," he says. Finally, these debts have senior status. If a company goes belly-up, these securities get paid first.
TIAA-CREF Core Impact Bond
- Symbol: TSBRX
- 1-year return: -5.0%
- 3-year return: 1.6%
- 5-year return: 2.1%
- 10-year return: --
- Yield: 1.7%
- Expense ratio: 0.61%
The focus: Medium-term, high-quality bonds that exceed environmental, social and governance tests. The fund invests one-third of assets in projects that make a measurable environmental and social impact. The fund has a duration of 6.5 years.
The process: Three managers invest in high-quality debt across a mix of sectors, including corporate, government, mortgage-backed, muni and asset-backed securities.
The track record: This core intermediate-term bond fund has kept pace with the Agg index since it launched.
The last word: The fund invested $2.4 billion in projects for environmental and social good in 2020. That helped underwrite affordable mortgages for 2.8 million American home buyers.
Vanguard Emerging Markets Bond
- Symbol: VEMBX
- 1-year return: -8.1%
- 3-year return: 3.5%
- 5-year return: 5.3%
- 10-year return: --
- Yield: 5.3%
- Expense ratio: 0.55%
The focus: Dollar-denominated debt in emerging economies. The fund has a duration of 7.0 years.
The process: Vanguard's fixed-income team focuses on emerging-markets government and corporate IOUs.
The track record: Emerging economies struggled over the past year, in part because slow vaccine rollouts hampered reopening efforts. The Russian invasion of Ukraine hasn't helped. (About 3.4% of the fund's assets were invested in Russia and 3.3% in Ukraine at last report.) The fund lagged the JPM EMBI Global Diversified Index over the past 12 months, despite shedding longer-dated bonds, which are more sensitive to interest rate shifts, and building well-timed positions in countries such as Ecuador and Colombia.
The last word: Volatility remains high in emerging-markets debt, and rising interest rates, the unwinding of accommodative monetary policies and Ukraine remain a risk. But the managers are defensively positioned; the fund holds 14% of assets in cash.
Vanguard High-Yield Corporate
- Symbol: VWEHX
- 1-year return: -1.1%
- 3-year return: 3.8%
- 5-year return: 4.3%
- 10-year return: 5.1%
- Yield: 4.6%
- Expense ratio: 0.23%
The focus: Below-investment-grade corporate debt. The fund has a 3.8-year duration.
The process: To minimize defaults and loss of principal and to maximize income, manager Michael Hong favors high-quality junk. Double-B-rated debt makes up 54% of assets; single-B debt accounts for 29%. Hong also favors mostly medium- to short-term bonds over long-maturity debt.
The track record: The market didn't favor Hong's tilts in 2021. The fund lost 1.1% over the past 12 months, which lagged 40% of all high-yield bond funds. But over the past five and 10 years, the fund beat its peers. Its super-low, 0.23% expense ratio helps.
The last word: The lower average maturity of bonds in the portfolio helps limit the fund's risk from rising rates.
Vanguard Short-Term Investment Grade
- Symbol: VFSTX
- 1-year return: -3.8%
- 3-year return: 1.5%
- 5-year return: 1.7%
- 10-year return: 1.9%
- Yield: 2.4%
- Expense ratio: 0.20%
The focus: High-quality debt of one- to five-year maturities. The fund has a 2.8-year duration.
The process: Three managers focus on corporate debt rated triple-A to triple-B. In a thriving economy, they favor triple-B debt; in challenging times, they tilt toward AA and AAA bonds.
The track record: Rising interest rates weighed on the fund's one-year return. But its three-year return, 1.5%, beat 59% of peers. Cash and Treasuries currently make up 12% of the fund's assets. "We'll put it to work when dislocations occur," says comanager Arvind Narayanan.
The last word: The fund isn't a savings account alternative, but it will hold up better than other types of bond funds during periods of rising interest rates.
Source: https://www.kiplinger.com/investing/mutual-funds/602176/kip-25-best-low-fee-mutual-funds
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