The Best Mutual Funds

All you need to know to pick the ones that fit your needs

After a year like 1995, who's going to complain? Diversified equity mutual funds, the meat and potatoes of most investors' portfolios, earned an average return of 32.1%, including dividends and capital gains. Think your funds' managers are so smart? Think again. The Standard & Poor's 500-stock index recorded a smashing 37.5% return, and it beat more than 80% of the mutual-fund managers. Even with its stock-picking smarts and trading prowess, the $53.7 billion Fidelity Magellan Fund came close but could not beat the market.

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