3 Great Funds for the Next 10 Years

Russel Kinnel: These are very volatile times for investors. With rapid shifts and tariffs, stocks and bonds have been having some wild swings. Where we go next in the next six months is very hard to predict. But that doesn’t mean you should just stick your money in a bank account until things settle down. You have long-term goals, and that requires long-term investing.

I picked three funds with strong fundamentals that should reward investors over the long haul. Most Americans have less overseas than the global market weighting suggests, so my picks have a global theme this time. Who knows who the winners and losers will be from the tariff battles, so it’s good to diversify.

3 Great Funds for the Next 10 Years

1. Vanguard International High Dividend Yield VIHAX
2. T. Rowe Price Global Allocation RPGAX
3. American Funds Global Balanced GBLAX

Let’s start with an index fund whose low cost and diverse portfolio should endure. Vanguard International High Dividend Yield. The fund takes a sensible approach to dividend investing. It tracks an index that takes the higher-yielding half of dividend stocks outside the US, but then it weights them by market cap rather than yield. The highest-yielding stocks also tend to have high risk because the market is implying that their yields are not sustainable. By instead weighting by market cap, you lose some of that income, but you gain stability. We rate the fund Silver.

You can add another level of diversification by throwing bonds in the mix, so consider Gold-rated T. Rowe Price Global Allocation. Charles Shriver and Toby Thompson invest in a portfolio that is 60% stocks, 28% bonds, and 12% alternatives. The money is farmed out to an excellent array of portfolio managers. Compared with the world-stock fund, you’ll get a little lower returns, most likely, but also lower risk.

Silver-rated American Funds Global Balanced combines these themes with dividend-paying stocks and a bond portfolio. American Funds make great long-term holdings because they have deep pools of managers and analysts. So, a manager retirement generally is handled in a smooth transition that doesn’t alter the fund’s course. American is particularly adept at dividend strategies as it does deep research to avoid value traps while still producing a decent yield.

Watch 6 Surprising Funds From a Surprising Month for more from Russel Kinnel.