Let’s go to our next question: how to judge low-cost but promising mutual funds? A good company, will eye large companies for investments. Such a company will have a consistent performance in major stock indexes like Russell 1000. And this has to be achieved after charging fees that is less than the investor’s average expense ratio of 0.74 percent. Such mutual funds company should require a minimum initial investment of $3,000 or less, thus opening the doors to wide range of investors, and also charge no upfront sales fee. Some such companies that meet these features include:

Mairs & Power Growth (MPGFX):

This fund gives preference to companies headquartered in the upper Midwest. The fund has no market-cap constraints, and seeks for opportunities in all types of big or small companies. The management believes in long-term investments. Compared to the average turnover rate of 100 percent for standard mutual funds, this fund’s turnover rate is near 10 percent, which means a holding period of about 10 to 20 years.

T. Rowe Price Growth Stock

This company primarily invests in fast-growing organizations with extremely promising prospects. As of August 03, 2012, the fund has assets totaling $28.55 billion. The company even has some holdings outside the United States. Some well known names they invest in include Apple, Google and Amazon. In the last five years, the fund has returned 2.51 percent and over the last returned around 7.66 percent.

Vanguard Dividend Growth (VDIGX)

This fund invests in stocks of high-quality companies with promising long-term total returns and willingness to pay higher dividends in due course. These stocks are usually undervalued and have the potential of generating greater dividends. The investment is usually spread across industry sectors.

Vanguard Equity Income:

This fund offers an above-average level of current income from the stock market. It focuses on companies that consistently pay dividends. It emphasizes on slower-growing, higher-yielding companies. So the consolidated return may not be strong in a when the chips are up. It is ideal for investors with long-term investment goal.