There are so many different investment options today that it can be hard to know where to start. In the United States alone, there are 800 fund families with approximately $23.2 trillion invested in U.S. open-end mutual funds and exchange-traded funds (ETFs).
However, certain fund families consistently offer lower costs, greater variety, and more innovative choices. Although there are many excellent picks, these five leading fund families have what most people want.
Below are the top five fund families as ranked by total assets under management (AUM), as of Dec. 31, 2020.
- Assets under management: $6.151 trillion
- Number of funds in family: 184
- 2020 net inflows: $140.6 billion
The Vanguard Group is the biggest retail asset manager in the world. The Pennsylvania-based company was founded by the late John C. Bogle, the legendary investor who, in 1976, launched the very first index fund marketed to retail investors: the Vanguard 500 fund.
Vanguard offers a wide range of mutual funds and ETFs to match a variety of investment styles and objectives. In addition to the original retail index fund, the Vanguard 500 Index Fund Admiral Shares (VFIAX), other notable funds offered by Vanguard include the Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) and the Vanguard S&P 500 ETF (VOO).
- Assets under management: $2.342 trillion
- Number of funds in family: 525
- 2020 net inflows: $138.4 billion
By some measures, BlackRock is considered the largest asset manager in the world. The New York-based company is best known for its iShares line of ETFs, which provide investors with a flexible, low-cost way to gain exposure to various market segments.
Whether you are looking to invest in specific countries or precious metals, an iShares ETF is usually available. Some notable funds offered by BlackRock include the iShares Core S&P 500 ETF (IVV), the iShares MSCI EAFE ETF (EFA), and the iShares Core U.S. Aggregate Bond ETF (AGG).
- Assets under management: $2.167 trillion
- Number of funds in family: 483
- 2020 net inflows: $9.6 billion
Fidelity is another leading investment management company. Its rise to prominence has been fueled by the stock-picking success of its mutual funds and its ability to adapt to investor preferences. The Massachusetts-based firm serves 38 million individual investors.
Some of Fidelity’s notable funds include the Fidelity 500 Index Fund (FXAIX), the Fidelity Government Money Market Fund (SPAXX), and the Fidelity Contrafund (FCNTX).
4. American Funds
- Assets under management: $2.037 trillion
- Number of funds in family: 75
- 2020 net inflows: -$32.0 billion
American Funds, a giant in the mutual fund world, is a division of California-based Capital Group, one of the largest asset managers in the United States. American Funds provides investors with choices in the equity, equity income, asset allocation, and fixed-income classes of funds.
Some of its notable funds with long track records include the American Funds Investment Company of America (AIVSX), the American Funds American Mutual Fund (AMRMX), and the American Funds Bond Fund of America (ABNDX).
5. State Street/SPDR
- Assets under management: $870 billion
- Number of funds in family: 181
- 2020 net inflows: $34.7 billion
State Street Global Advisors is the asset management division of Massachusetts-based State Street Corp., one of the largest institutional asset managers in the world. The company is known for creating the world’s first-ever ETF in 1993. Over the years, it has developed its SPDR family of ETFs, which implement both active and index strategies across a range of different asset classes.
The Bottom Line
The top five fund families listed above provide investors with a variety of options catering to a range of investment styles and objectives. Most investors are likely to find a fund among these five that will suit their investment needs, whether that be low costs, liquidity, active or passive management, or a specific asset class. Also, remember that it is not necessary to stick with one fund family. Investors can pick and choose among funds from these top families or go with other options. The best investments are the ones that can be lived with over the long run.