Invest your 401(k) in TAIFX for the greatest portfolio diversification. If you can sustain greater risk, consider FSELX for high 10-year returns.
Maximize your 401(k) savings with high-performing investments. The more interest and returns you earn on your retirement account, the more comfortable you’ll be in retirement and the sooner you’ll achieve your goals. You’ve already placed the money aside, now make it grow with the best 401(k) investments.
Quick Look: The Best 401(k) Investments of 2024
- Best for Portfolio Diversification: American Funds Tax-Aware Conservative Growth and Income Portfolio F1 (TAIFX)
- Best for Time-tested Mutual Fund: Vanguard Wellington Fund (VWELX)
- Best for Dividend Stock Investing: T. Rowe Price Dividend Growth Fund (PRDGX)
- Best for High Returns: Fidelity Select Semiconductors Portfolio (FSELX)
- Best for Investing in Technology Businesses: Columbia Seligman Global Technology Fund Class A (SHGTX)
Best 401(k) Investments
Review this top list of 401(k) funds to find the best investments for your retirement accounts to grow your savings and prepare for the next phase of life.
1. Best for Portfolio Diversification: American Funds Tax-Aware Conservative Growth and Income Portfolio F1 (TAIFX)
Expense ratio: 0.68%
Total assets: $258.5 million
10-year average return: 6.16%
When you hold TAIFX, you have six mutual funds, which help mix your assets among domestic and foreign stocks as well as fixed-income investments. Earn quarterly dividend payments when you have at least $250 to invest.
Why We Love It: The diversification of owning six mutual funds with your TAIFX investment helps take some of the guesswork out of investing your 401(k).
2. Best for Time-tested Mutual Fund: Vanguard Wellington Fund (VWELX)
Expense ratio: 0.26%
Total assets: $112.7 billion
10-year average return: 7.14%
Invest in the oldest balanced mutual fund with the Vanguard Wellington Fund. Approximately 70% of its portfolio is stocks with the rest being bonds. The investment strategy weighs heavily on large-cap companies with long-running, dependable dividends. When investing in the fund, you’ll have a portfolio of roughly 80 stocks without the stress of selecting each one. The fund has a history of good returns while featuring a low expense ratio to effectively put your money to work for you.
Why We Love It: Compared to other mutual funds, VWELX offers greater performance over the last decade and offers a unique investment strategy.
3. Best for Dividend Stock Investing: T. Rowe Price Dividend Growth Fund (PRDGX)
Expense ratio: 0.64%
Total assets: $25.1 billion
10-year average return: 11.91%
Enjoy a conservative approach to dividend stock investing with the perk of worrying less about price volatility. The fund managers for PRDGX carefully select dividend stocks that have shown over time to be price-stable while earning investors a nice cash flow. The 10-year return for the fund shows its stability alongside effective earnings.
Why We Love It: Conservative dividend investing helps your money grow with less risk than simply investing in stocks with the biggest dividends. The fund balances risk with returns to offer a secure place to hold your funds.
4. Best for High Returns: Fidelity Select Semiconductors Portfolio (FSELX)
Expense ratio: 0.65%
Total assets: $20.6 billion
10-year average return: 27.62%
If you’re looking to maximize returns on your investment and have minimal concerns about risk, FSELX is a good fund to invest in. It is listed as a higher-risk fund but also provides some of the largest returns. Consider adding it to your portfolio, among many other investments, for diversification and risk mitigation.
Why We Love It: FSELX offers the opportunity to grow your money with some of the best returns available, making it an ideal fund to add to your retirement portfolio.
5. Best for Investing in Technology Businesses: Columbia Seligman Global Technology Fund Class A (SHGTX)
Expense ratio: 1.3%
Total assets: $2.4 billion
10-year average return: 20.1%
Investing in technology companies is wise because technology is the backbone of today’s society. And yet, it’s also risky because technology companies come and go because change is so rapid in the industry. If you can withstand some risk, SHGTX offers incredible 10-year returns and the chance to hold stock in many technology-related businesses both in the U.S. and beyond.
Why We Love It: SHGTX's 10-year returns are impressive. The fund is specific about the types of companies it invests in, offering diversification of your portfolio.
Compare the Best 401(k) Investments
| 401(k) Fund | Expense Ratio | Total Assets | Average Annual Return/10 year |
| TAIFX | 0.68% | $258.5 million | 6.16% |
| VWELX | 0.26% | $112.7 billion | 7.14% |
| PRDGX | 0.64% | $25.1 billion | 11.91% |
| FSELX | 0.65% | $20.6 billion | 27.62% |
| SHGTX | 1.3% | $2.4 billion | 20.1% |
How to Choose the Best Investments for a 401(k)
As you look to select your 401(k) investments, consider these factors to guide your investment strategy.
- Risk: The older you get, the less risk you can take on as you will need to start drawing money from your retirement accounts. Assess how much risk you can assume before choosing the ideal investments.
- Age: When you’re young, you can be more aggressive with your retirement accounts and work to earn the highest returns while taking on some risk. But as you age, you should adjust your investment strategy to focus more on stability while still working toward returns.
- The amount you need to retire: Depending on your income and how much of that you can devote to savings, you might need greater returns for your account to reach the threshold you need to retire. Look at your savings rate mixed with returns to see whether you need to adjust your strategy to help you achieve your goals.
- Returns: Funds with greater 10-year returns will help you grow your money at a faster rate. You want to look at that in conjunction with how well the fund holds its value.
- Diversification: Avoid placing your full account in the same types of funds or stocks. That way if that market segment experiences a downturn, you’ll still see strong returns on your investments for that year.
Grow Your Retirement Accounts with Stability Using Mutual Funds
An investment fund offers diversification with a strategic management team focused on earning you returns. You won’t have to worry about selecting each stock, bond and investment yourself. Instead, you’ll be selecting a fund based on its returns and stability to make investing your 401(k) easier. Review Benzinga’s top funds to invest your retirement savings with and select the one that best meets your needs.
Frequently Asked Questions
What is the best investment for 401(k) right now?
The best investment for your 401(k) right now varies based on your age and goals. Consult a financial advisor to learn how to diversify your portfolio based on your retirement target.
What are the best 401(k) investments for young adults?
The best 401(k) investments for young adults are target-date funds because they take the guesswork out of investing and adjust as you age.
Where is the safest place to put my 401(k) money?
The safest place to put your 401(k) money is bond funds, money market funds and index funds. These stable investments offer small returns though, so your safe money won’t grow as quickly as if you were to leave room for some risk through diversification.
About Rebekah Brately
Rebekah Brately is an investment writer passionate about helping people learn more about how to grow their wealth. She has more than 12 years of writing experience, focused on technology, travel, family and finance. Her work has been published in Benzinga, Hearst Bay Area, FreightWaves and Dallas Observer publications.