The best and most respected investment companies of today are Vanguard, Fidelity, and American Funds.
Vanguard has been in a neck-and-neck race with American Funds for years, and in 2007 Vanguard edged out as the as the nation’s top-selling fund company. What makes it stand out above the rest is that it provides superior investment options, and is owned by its shareholders, so its expenses are very low. For example, the Vanguard Wellington plan, which is considered a near-perfect choice for retirement investment by financial advisers, places 65 percent of assets in big company stocks, 32 percent in high-quality, intermediate-term bonds (bonds that last 3.5 – 6 years and rotate among better-valued sectors in the bond market) and the remaining amount in cash – and the expense ratio is very, very small (only 0.27 percent). The Vanguard Primecap Core plan is also a top choice with a nice expense ratio of 0.55 percent. And the Vanguard REIT Index Fund allows 401k contributors to invest in real-estate investment trusts instead of stocks and only charges 0.2 percent in expenses – a plan that is highly recommended by advisors. Other things consumers seem to love with Vanguard are their low-cost EFTs (electronic funds transfers). However, one of the problems you’ll find with Vanguard is that many of their top performers are withheld from 401(k) plans.
While Vanguard is the top-selling fund company, Fidelity Investments has the largest network when it comes to distributing corporate 401k retirement plans. Many say that in comparison with Vanguard, Fidelity is the epitome of big business, but unfortunately is not as personable. So with this company, finding the right manager for your fund account can make or break your experience. A few of Fidelity’s top funds that make it, rank high among other companies are Magellan, Contrafund, and Emerging Markets. Magellan is loved because it is channeled to both foreign stocks and domestic juggernauts like Google. Contrafund, which is only available through employer retirement plans, is a favorite because it falls into the top five percent of large-growth mutual funds and has been there for well over a decade. And Fidelity Emerging Markets is ranked as one of the best due to its reasonable fees and because it has beaten 97 percent of its competition over the past three years. Between these three retirement funds, advisors feel that investors are definitely in good hands with Fidelity.
American Funds is another top choice in investment companies for retirement, and is the world’s largest fund company. If you’ve never heard of it, it is because it doesn’t advertise to individuals – only working with brokers and financial advisers. This company offers significantly fewer mutual funds than the competitors, keeping its stash in the dozens. But surprisingly, this has helped the company grow into a humongous company for retirement investing. In fact, American Funds has seven of the ten largest mutual funds, including Growth Fund of America, which is by far the largest fund in the world to date.
There are several other large companies like Edward Jones and Wells Fargo that are well-known in the investment world, but these three companies above know the business well, and thus are very likely to deliver the results you need. The fact of the matter is though, it truly depends on your needs as to whom is the top investment company for you. It depends on a multitude of factors including how much money you’re starting off investing with, what kind of service you need, and various other factors. Be certain to visit our lessons to help you devise a plan so you know who and what to look for depending on your demands.