Real examples of best historical returns: mutual fund examples investors can learn from

Big-picture context before we get to the mutual fund examples

Before we walk through examples of best historical returns: mutual fund examples, it helps to set expectations.

Academic research going back nearly a century shows that, on average, actively managed mutual funds underperform their benchmarks after fees and taxes. The SPIVA scorecards from S&P Dow Jones Indices (available at spglobal.com) repeatedly show that a majority of active U.S. equity funds lag the S&P 500 over 10-, 15-, and 20-year horizons.

And yet, some funds do post outstanding long-term records. These are the outliers investors love to talk about. The key is to treat these funds as case studies, not forecasts.

Below are real, widely cited examples of best historical returns: mutual fund examples that illustrate what long-term success looks like, what it costs in volatility, and why it’s so hard to identify the winners in advance.

Flagship U.S. stock fund: Fidelity Contrafund as a long-term example

One of the best-known examples of best historical returns: mutual fund examples in the large-cap growth space is Fidelity Contrafund (FCNTX).

• Category: Large-cap growth
• Inception: 1967
• Manager tenure: Will Danoff since 1990
• Benchmark: Commonly compared to the S&P 500

Over the three decades from the early 1990s through the mid‑2010s, Contrafund significantly outpaced the S&P 500. Morningstar data (see morningstar.com) shows that for long stretches, its annualized return exceeded the index by several percentage points per year. That doesn’t sound dramatic until you compound it over 20–30 years.

Investors who stuck with Contrafund from the early 1990s through, say, 2020 saw:

• Massive growth from early bets on companies like Amazon and Meta (Facebook)
• Periods of sharp drawdowns when growth stocks fell out of favor
• A gradual narrowing of the performance gap versus cheap index funds as the fund’s asset base ballooned and markets became more efficient

This is a textbook example of how a star manager can create one of the best examples of long-term outperformance, but also how asset growth and competition compress that edge over time.

Classic growth story: T. Rowe Price Blue Chip Growth

Another widely cited example of best historical returns: mutual fund examples is T. Rowe Price Blue Chip Growth (TRBCX).

• Category: Large-cap growth
• Inception: 1993
• Focus: Established “blue chip” growth companies

From its inception through the 2010s, Blue Chip Growth often ranked near the top of its category. Morningstar’s trailing return data has repeatedly shown double-digit annualized returns over 10- and 15-year windows, frequently ahead of the S&P 500 and category peers.

The fund’s long-term record highlights several themes:

• Concentration in a relatively small group of dominant growth names
• Willingness to ride winners (think tech and communications giants) for many years
• High volatility during tech-led selloffs

For investors studying real examples of active success, TRBCX shows how a disciplined growth strategy can outperform for decades, but at the cost of stomach-churning swings when growth stocks fall out of favor.

Small-cap standouts: mutual fund examples with big upside and big risk

When people talk about examples of best historical returns: mutual fund examples, small-cap funds often show up because small stocks have historically offered higher average returns than large caps, according to long-term research from the Center for Research in Security Prices (CRSP) at the University of Chicago (chicagobooth.edu).

Two real examples stand out:

Vanguard Explorer (VEXPX)

• Category: Small- and mid-cap growth
• Inception: 1967
• Approach: Multi-manager, diversified small-cap exposure

Over multiple decades, Vanguard Explorer has generated strong long-term returns, especially in periods when small-cap growth stocks were in favor. While it hasn’t always beaten small-cap indexes in every window, it’s frequently cited as one of the best examples of a long-lived, relatively low-cost active small-cap fund with competitive returns.

T. Rowe Price Small-Cap Stock (OTCFX)

• Category: Small-cap blend
• Inception: 1956
• Focus: Smaller U.S. companies across sectors

OTCFX has a long history of double-digit annualized returns over multi-decade periods, albeit with deep drawdowns during recessions and bear markets. For investors examining examples of best historical returns: mutual fund examples, OTCFX shows how small caps can turbocharge wealth over 20–30 years, but only if you can tolerate long stretches of underperformance and sharp declines.

These small-cap funds are powerful real examples of the risk–return tradeoff: higher potential historical returns, but much bumpier rides.

Sector funds: spectacular historical returns with concentrated risk

Some of the most eye-catching examples of best historical returns: mutual fund examples come from sector funds that rode powerful multi-decade trends.

Fidelity Select Technology (FSPTX)

• Category: Technology sector
• Inception: 1981
• Focus: U.S. and global technology companies

Tech as a sector has been a long-term winner, and FSPTX is one of the best examples of that trend. Over long horizons that include the 1990s tech boom and the 2010s cloud and mobile revolution, annualized returns have been extremely high compared with the broad market.

But here’s the catch illustrated by this example of a sector fund:

• The fund lost a huge chunk of its value in the 2000–2002 tech bust.
• Investors who bought near the peak waited many years just to break even.

This is a classic case study in how examples of best historical returns: mutual fund examples can also be examples of brutal volatility. The long-term chart looks fantastic; the lived experience often did not.

Fidelity Select Health Care (FSPHX)

• Category: Health care sector
• Inception: 1981
• Focus: Pharmaceuticals, biotech, medical devices, health services

Health care has historically produced strong risk-adjusted returns, supported by aging populations and steady demand. FSPHX has delivered excellent long-term performance, often beating the S&P 500 over extended periods.

For investors looking for real examples of sector funds that combined strong growth with somewhat lower cyclicality than tech, FSPHX is a standout. Still, it comes with policy risk (drug pricing debates, regulation) and stock-specific blowups, especially in biotech.

International and emerging markets: high dispersion among mutual fund examples

When you move outside the U.S., the dispersion between winners and losers grows. That makes international funds fertile ground for examples of best historical returns: mutual fund examples, but also a warning about manager selection risk.

American Funds EuroPacific Growth (AEPGX)

• Category: Foreign large growth
• Inception: 1984
• Focus: Developed and emerging markets outside the U.S.

For many years, AEPGX was one of the best examples of a core international holding with strong long-term returns. The fund benefited from:

• Exposure to non-U.S. multinationals
• Selective emerging markets positions
• A multi-manager structure that diversified style risk

Over long windows that included the 1990s and early 2000s, its annualized returns often beat the MSCI EAFE index. More recently, as U.S. markets outperformed most international markets, the fund’s relative edge narrowed.

T. Rowe Price Emerging Markets Stock (PRMSX)

• Category: Diversified emerging markets
• Inception: 1995
• Focus: Emerging markets equities across regions

Emerging markets offer some of the most dramatic examples of best historical returns: mutual fund examples in specific periods. PRMSX has had stretches of spectacular gains when emerging markets rallied (for example, mid‑2000s and parts of the 2010s), but also long flat or negative periods.

This is a real example of how headline-grabbing historical returns in emerging markets often come in short, violent bursts, surrounded by long, frustrating sideways markets.

Balanced and allocation funds: steadier mutual fund examples

Not every investor wants to chase the highest possible line on a chart. Some of the most useful examples of best historical returns: mutual fund examples are balanced funds that mix stocks and bonds.

Vanguard Wellington (VWELX)

• Category: Moderate allocation (roughly 60/40 stocks to bonds)
• Inception: 1929
• Focus: Dividend-paying value stocks and high-quality bonds

Wellington is one of the oldest mutual funds in the United States and a widely cited example of long-term success with a balanced approach. Over many decades, it has often delivered:

• Equity-like returns with lower volatility than a 100% stock portfolio
• Smaller drawdowns in bear markets
• Competitive returns compared with many all-stock active funds

For investors studying examples of best historical returns: mutual fund examples that prioritize smoother rides, Wellington is a strong candidate.

American Funds American Balanced (ABALX)

• Category: Moderate allocation
• Inception: 1975
• Focus: U.S. large-cap stocks and investment-grade bonds

ABALX has a multi-decade record of solid returns with a focus on income and capital preservation. It’s often used in retirement plans as a core holding and serves as a real example of how a well-run balanced fund can support long-term goals without chasing maximum risk.

What these mutual fund examples really teach about historical returns

Looking across these examples of best historical returns: mutual fund examples, a few patterns show up again and again:

1. Long-term outperformance is rare and hard to predict
Studies by the Federal Reserve and academic researchers (for example, work cited by the Federal Reserve Bank of St. Louis at stlouisfed.org) show that only a minority of active funds beat their benchmarks over long horizons, especially after accounting for fees and taxes. The funds highlighted above are best examples, not the average experience.

2. Volatility is the price of high returns
The most eye-catching mutual fund examples—tech, small caps, emerging markets—also suffered the deepest drawdowns. Investors who enjoyed those historical returns had to sit through years of underperformance and large temporary losses.

3. Size and success can erode future performance
Many of the examples of best historical returns: mutual fund examples started small and nimble. As assets grew into the tens of billions, it became harder for managers to find enough high-conviction ideas without moving markets, which often led to performance converging toward index-like results.

4. Fees and taxes matter more than most investors expect
Even among the best examples of active funds, higher expense ratios and frequent trading can drag down investor returns. Research from the SEC and academic institutions like Harvard (see finance research at harvard.edu) consistently finds that lower fees are strongly correlated with better net performance.

5. Investor behavior often lags fund performance
One uncomfortable truth: the average investor in a successful fund often earns less than the fund’s stated historical return because they buy after strong performance and sell after weak periods. Many of the real examples above have excellent long-term track records, but investor dollar-weighted returns are lower due to poor timing.

How to use these examples of best historical returns without getting burned

Learning from examples of best historical returns: mutual fund examples is useful, but copying them blindly is not a strategy.

Here’s how to use these case studies intelligently:

• Treat them as proof that outperformance is possible, not as a shopping list for your portfolio.
• Compare any active fund you’re considering to these best examples on key dimensions: fees, manager tenure, strategy clarity, and risk profile.
• Remember that past performance, even in spectacular examples of success, does not predict future results. Regulators like the SEC hammer this point home in investor education materials at investor.gov.
• Use low-cost index funds as your baseline, and only add active funds if you have a clear reason and understand the tradeoffs.

If you’re building a portfolio today, it’s more realistic to aim for market-like returns with good behavior (staying invested, keeping costs low, rebalancing) than to hope you’ll pick the next Contrafund in its early years.

FAQ: examples of best historical returns and what they mean for you

Q: What are some well-known examples of best historical returns: mutual fund examples in U.S. stocks?
Well-known examples include Fidelity Contrafund (FCNTX), T. Rowe Price Blue Chip Growth (TRBCX), and sector funds like Fidelity Select Technology (FSPTX). These funds have, at various points, delivered long-term returns above the S&P 500, though with significant volatility.

Q: Can I just buy the funds with the best historical returns and expect similar results?
No. Every prospectus reminds you that past performance does not guarantee future results. Even the best examples of historical returns often go through long slumps. Markets change, managers retire, assets balloon, and the conditions that drove past success rarely repeat exactly.

Q: Are there examples of balanced mutual funds with strong long-term records?
Yes. Examples of balanced funds with solid historical returns include Vanguard Wellington (VWELX) and American Funds American Balanced (ABALX). They show how mixing stocks and bonds can produce competitive long-term results with milder swings than all-stock funds.

Q: How do these mutual fund examples compare with index funds over 20+ years?
On average, broad index funds—like those tracking the S&P 500 or total market indexes—have beaten most active funds over 20-year windows, especially after fees and taxes. The examples of best historical returns: mutual fund examples discussed here are the minority that beat their benchmarks. They are instructive, but not representative.

Q: Where can I find reliable data to analyze more examples of mutual fund performance?
You can review long-term return data and risk metrics at sites like Morningstar, fund company websites, and educational resources from U.S. regulators such as the SEC’s investor.gov. For academic perspectives on long-run asset returns, research from institutions like the University of Chicago’s Booth School of Business and the Federal Reserve Banks is also helpful.

Bottom line: Studying examples of best historical returns: mutual fund examples is valuable, but the real edge comes from building a disciplined, low-cost portfolio and sticking with it—rather than trying to guess the next legendary fund in advance.