These 10 mutual funds had the best returns of the decade

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Coming off of a 40-year high this summer, inflation has only recently started to ease at 8.3% in August, according to government data. So far in 2022, the Fed made two consecutive rate hikes of 75 basis points in June and July, and major stock indexes have notched significant losses. And while that news may seem bleak, for those who have stuck with their mutual funds through the past decade, those numbers may just be a slight speed bump in the rearview mirror. 

So which funds have managed to withstand the past 10 years of market pressures? With an average annualized return of 18.62%, all of the 10 best-performing mutual funds of the decade outpaced broader markets, Morningstar data show. For comparison, stock trackers such as the SPDR S&P 500 ETF Trust, or SPY, had a 10-year gain of roughly 13%, while the SPDR Dow Jones industrial Average ETF, or DIA, had a return of 11.65%, over the period. 

Robby Greengold, manager research analyst at Morningstar, says those with the best long-term gains unsurprisingly had their heavy exposure to industries that have seen huge gains over the past decade. “Across sectors, tech stocks notched the highest returns, on average,” he said. “That explains the dominance of tech funds in the top-ranking funds. Chipmakers, such as NVIDIA and Broadcom, performed exceptionally well, which explains the high rankings for Fidelity’s semiconductor-focused funds.”

If one were to only focus on short term returns, however, mutual funds could easily be overlooked. During the past 12 months, the same top-performers recorded an average loss of 20.9%. That is more than double the 8.63% and 6.6% respective losses posted by trackers SPY and DIA. That said, a year of performance data shouldn’t be the deciding factor when analyzing any fund, according to Greengold. “It’s extraordinarily challenging to derive much insight about a fund’s prospects based on a single year of its performance.”

One thing that is hard to ignore when looking at these funds, however, are their fees. With an average net expense ratio of 125 basis points, mutual funds with the best returns cost investors more than three times the asset-weighted average expense ratio across all funds, which was 0.40% in 2021, according to Morningstar’s latest fee study.

Mutual funds in this ranking have assets of at least $100 million and investment minimums of less than $100,000. Daily returns are as of Sept. 9. All data is from Morningstar Direct. 

10. Fidelity Select Technology (FSPTX)

10-yr. annualized return: 16.73%

YTD return: -32.35%; 1-yr. return: -29.95%; 3-yr. annualized return: 15.49%; 5-yr. annualized return: 15.01%; 15-yr. annualized return: 13.02%; YTD net share class flow (millions): -$734.74; 1-yr. net share class flow (millions): -$846.75; 3-yr. net share class flow (millions): -$546.55; 5-yr. net share class flows (millions): -$2,419.61; 10-yr. net share class flow (millions): -$1,542.97; 15-yr. net share class flow (millions): -$1,774.26; Net expense ratio: 0.67%; Minimum initial investment: N/A; Fund size (millions): $8,702.17; Inception date: 7/14/1981; Inception date Manager name: Adam Benjamin

9. Columbia Seligman Technology & Information C (SCICX)

10-yr. annualized return: 16.89%

YTD return: -28.04%; 1-yr. return: -21.08%; 3-yr. annualized return: 17.43%; 5-yr. annualized return: 16.16%; 15-yr. annualized return: 12.48%; YTD net share class flow (millions): -$32.39; 1-yr. net share class flow (millions): -$39; 3-yr. net share class flow (millions): -$213.41; 5-yr. net share class flows (millions): -$897.37l 10-yr. net share class flow (millions): -$1,296.28; 15-yr. net share class flow (millions): -$1,486.25; Net expense ratio: 1.94; Minimum initial investment: $2,000; Fund size (millions): 8,496.87; Inception date: 5/27/1999; Manager names: Paul H. Wick, Sanjay Devgan, Shekhar Pramanick, Jeetil Patel, Vimal Patel and Israel Hernandez

8. Baron Focused Growth Retail (BFGFX)

10-yr. annualized return: 17.11%

YTD return: -19.34%; 1-yr. return: -10.87%; 3-yr. annualized return: 33.22%; 5-yr. annualized return: 24.81%; YTD net share class flow (millions): $23.86; 1-yr. net share class flow (millions): $33.85; 3-yr. net share class flow (millions): $80.62; 5-yr. net share class flows (millions): $74.57; 10-yr. net share class flow (millions): $68.59; Net expense ratio: 1.32%; Minimum initial investment: $2,000; Fund size (millions): $780.51; Inception date: 6/30/2008; Manager names: Ronald Baron and David Baron

7. Fidelity Select Software & IT Services Portfolio (FSCSX)

10-yr. annualized return: 17.36%

YTD return: -26.13%; 1-yr. return: -27.42%; 3-yr. annualized return: 10.9%; 5-yr. annualized return: 15.25%; 15-yr. annualized return: 14.73%; YTD net share class flow (millions): -$886.91; 1-yr. net share class flow (millions): -$1,081.58; 3-yr. net share class flow (millions): -$1,357.89; 5-yr. net share class flows (millions): -$612.53; 10-yr. net share class flow (millions): -$749.89; 15-yr. net share class flow (millions): -$166.28; Net expense ratio: 0.67%; Minimum initial investment: N/A; Fund size (millions): $9,167.81; Inception date: 7/29/1985; Manager name: Ali Khan

6. Columbia Seligman Global Technology C (SHTCX)

10-yr. annualized return: 17.4%

YTD return: -28.53%; 1-yr. return: -21.71%; 3-yr. annualized return: 17.51%; 5-yr. annualized return: 16.14%; 15-yr. annualized return: 12.35%; YTD net share class flow (millions): -$7.53; 1-yr. net share class flow (millions): -$10.65; 3-yr. net share class flow (millions): -$42.21; 5-yr. net share class flows (millions): -$127.52; 10-yr. net share class flow (millions): -$142.65; 15-yr. net share class flow (millions): -$166.94; Net expense ratio: 2.04%; Minimum initial investment: $2,000; Fund size (millions): 1,567.34; Inception date: 5/27/1999; Manager names: Paul H. Wick, Sanjay Devgan, Shekhar Pramanick, Christopher Boova, Vimal Patel and Sanjiv Wadhwani

5. Columbia Global Technology Growth C (CTHCX)

10-yr. annualized return: 17.55%

YTD return: -29.93%; 1-yr. return: -27.82%; 3-yr. annualized return: 11.5%; 5-yr. annualized return: 13.93%; 15-yr. annualized return: 11.1%; YTD net share class flow (millions): -$25.59; 1-yr. net share class flow (millions): -$33.1; 3-yr. net share class flow (millions): -$58.74; 5-yr. net share class flows (millions): -$45.46; 10-yr. net share class flow (millions): -$9.33; 15-yr. net share class flow (millions): -$16.91; Net expense ratio: 1.93%; Minimum initial investment: $2,000; Fund size (millions): $2,102.21; Inception date: 10/13/2003; Manager name: Rahul Narang

4. Vanguard Information Technology Index Admiral (VITAX)

10-yr. annualized return: 17.79%

YTD return: -25.59%; 1-yr. return: -20.33%; 3-yr. annualized return: 16.91%; 5-yr. annualized return: 18.96%; 15-yr. annualized return: 13.48%; YTD net share class flow (millions): -$249.17; 1-yr. net share class flow (millions): $36.95; 3-yr. net share class flow (millions): $1,547.98; 5-yr. net share class flows (millions): $2,509.27; 10-yr. net share class flow (millions): $3,016.84; 15-yr. net share class flow (millions): $3,078.87; Net expense ratio: 0.1%; Minimum initial investment: $100,000; Fund size (millions): $42,359.07; Inception date: 3/25/2004; Manager names: Walter Nejman and Nick Birkett

3. Fidelity Advisor Semiconductors C (FELCX)

10-yr. annualized return: 20.39%

YTD return: -35.26%; 1-yr. return: -21.4%; 3-yr. annualized return: 19.94%; 5-yr. annualized return: 18.88%; 15-yr. annualized return: 12.41%; YTD net share class flow (millions): -$0.74; 1-yr. net share class flow (millions): $7.41; 3-yr. net share class flow (millions): $1.58; 5-yr. net share class flows (millions): -$7.43; 10-yr. net share class flow (millions): $17.87; 15-yr. net share class flow (millions): $14.61; Net expense ratio: 1.79%; Minimum initial investment: N/A; Fund size (millions): $751.4; Inception date: 12/27/2000; Manager name: Adam Benjamin

2. Fidelity Select Semiconductors (FSELX)

10-yr. annualized return: 21.95

YTD return: -34.86%; 1-yr. return: -20.28%; 3-yr. annualized return: 21.53%; 5-yr. annualized return: 20.5%; 15-yr. annualized return: 13.99%; YTD net share class flow (millions): -$310.63%; 1-yr. net share class flow (millions): $788.95%; 3-yr. net share class flow (millions): $821.02%; 5-yr. net share class flows (millions): $224.51%; 10-yr. net share class flow (millions): $510.95%; 15-yr. net share class flow (millions): -$165.79%; Net expense ratio: 0.68%; Minimum initial investment: N/A; Fund size (millions): $6,535.66; Inception date: 7/29/1985; Manager name: Adam Benjamin

1. Baron Partners Retail (BPTRX)

10-yr. annualized return: 23.12%

YTD return: -23.42%; 1-yr. return: -8%; 3-yr. annualized return: 41.71%; 5-yr. annualized return: 29.86%; 15-yr. annualized return: 14.53%; YTD net share class flow (millions): -$73; 1-yr. net share class flow (millions): -$62.76; 3-yr. net share class flow (millions): -$399.47; 5-yr. net share class flows (millions): -$650.71; 10-yr. net share class flow (millions): -$875.17; Net expense ratio: 1.36%; Minimum initial investment: $2,000; Fund size (millions): $6,614.93; Inception date: 4/30/2003; Manager names: Ronald Baron and Michael Baron

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