Best mutual funds in June 2025

Equity mutual funds provide exposure to a portfolio of publicly traded stocks, and include many categories such as where the stock is listed, the company’s size, whether it offers a dividend and its industry group. Investors can select a narrowly diversified fund that focuses on a single industry or a broadly diversified fund that includes stocks across many or even all industries.

Stock mutual funds are usually more volatile than other types of investments such as bonds, but they’re appropriate for long-term investors looking for high returns. Below are some of the most popular fund sectors and the funds’ historical performance, as of May 30, 2025.

This category provides broad exposure to publicly traded companies on U.S. exchanges with a passive approach that tracks a major index, such as the S&P 500 or Nasdaq 100.

This kind of fund can offer access to foreign publicly traded stocks, either globally or in specific regions such as Europe or Asia or by economic status such as developing markets. Investing in foreign companies increases certain risks such as currency risk and governance risks, and foreign countries may not offer similar protections for investors as the U.S. does.

Funds in this category target a specific industry, giving investors the ability to invest in a narrow segment of companies such as consumer staples, financials, technology or healthcare. These funds are usually passive, so they track all the companies in a specific sector and mechanically replicate the index and weighting of the component stocks.

This kind of fund invests in only dividend-paying stocks, and they’re often passively managed, merely tracking a preset index of dividend stocks rather than picking individual securities. Because it pays a dividend, this kind of fund tends to be less volatile than other kinds of stock funds, and it can be especially attractive for those looking for reliable income, including retirees.

A bond mutual fund owns a portfolio of bonds, and they’re often divided into the type of bond they own: the issuer, maturity and various other factors. Bonds pay interest on a regular schedule, and the fund passes this income on to the fund’s investors. Bonds can be a popular investment for those who need the safety of regular income, and they tend to be less volatile than stock funds, though the returns have been lower over time. 

Some of the most popular bond funds and their returns include the following:

This type of bond fund owns bonds with a long maturity, often 10 years or more. This kind of bond is most exposed to changes in interest rates, as they move up or down. While these funds often return higher yields than short-term bond funds, they may not be worth the extra risk.

This type of bond fund owns bonds that mature in a short time frame, usually no more than a few years. These bonds won’t move much in response to changes in prevailing interest rates, making them less volatile compared to long-term bonds.

This type of bond fund owns a wide selection of bonds, diversified in particular by issuer and maturity, including short-, medium- and long-term bonds. This kind of bond fund offers investors a way to get broad exposure to bonds without investing too much in any maturity or issuer.

“Muni” bond funds own bonds issued by states and cities, and the interest on these bonds is tax-free, though it’s not as high as interest paid on regular bonds by other issuers. Muni bonds are one of the safest areas of the market, and their track record of defaults is low.

Money market funds own short-term securities issued by governments and corporations, and they offer competitive interest rates that fluctuate with the prevailing short-term interest rate. They’re an attractive way to get a strong yield without enduring much risk.

A balanced mutual fund owns stocks and bonds, and its goal is to provide exposure to the attractive return of stocks while reducing the volatility somewhat by adding in bonds, which are typically more stable. A balanced fund may be a better choice for long-term investors who are more conservative and less risk-tolerant but still need growth in their portfolio over time.

Real estate mutual funds own stocks that are known as REITs, or real estate investment trusts. REITs make money from the management of real estate or the ownership of mortgages on real estate. These stocks operate in many industries, including residential, lodging, commercial, medical buildings and many more. REITs do not pay taxes at the corporate level in exchange for paying out most of their income as dividends to investors. So, this sector is an attractive way to generate reliable income, making REITs popular with investors who need income.

Choosing the best mutual fund for you depends a lot on what you need, in particular your risk tolerance and time horizon. But it also depends on what else you already have in your portfolio. Here are a few key questions to consider in finding the best mutual fund for you:

• When do you plan to access the money? The longer your time horizon, the more risk you can take, meaning stock funds could be the more appropriate investment. If you need the money in the next year or two, you may want to reduce your risk with bond or money market funds.
• Can you withstand temporary losses and hold on? If you can stick with your investing plan for the long term, stock funds will likely be a better investment for you.
• Do you have a specific gap in your portfolio? You may need greater balance in your portfolio. Are you heavily allocated toward bond funds and need some stocks to balance out your returns, or vice versa? Are you invested only in U.S.-based investments and not foreign stocks?

It’s important to know your portfolio and financial situation so that you can assess what mutual fund may be best for you. But even when you find a fund type that you like, you’ll also want to assess which funds are better along a few dimensions.

Ask yourself the following questions:

• What is the fund’s longer-term track record? A higher-performing long-term record (over five or 10 years) is better than a lower one. The fund’s long-term record is your best gauge to how well it may perform in the future.
• Has the fund done well only in the last year or two? A fund that has outperformed only recently may eventually revert to its long-term record. Investors often chase hot performance, then end up buying high and almost inevitably selling low.
• What does the fund charge for investing? Is there a sales load? It’s easy to avoid a sales load, but virtually all mutual funds charge an expense ratio to cover the ongoing costs of the fund and generate a profit.

Some funds (such as index funds) invest in literally the same stocks or bonds as other similar funds. So you can find the same “product” for a lower expense ratio by searching around. For example, any fund based on the Standard & Poor’s 500 index will have substantially the same holdings as another, so the real basis for comparison is the fund’s fees. As the old investor saying goes, “Fees are certain but returns are not.”

Certain investors prefer exchange-traded funds over mutual funds – here’s what to consider.

Mutual funds come in a variety of types and are categorized by the type of investments they own – stock funds, bond funds, money market funds, balanced funds and target date funds.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.