Best-Performing Funds Over the Past 20 Years

A fractional difference in annual performance can have a huge impact over long periods of time. For example, the Vanguard Health Care Fund's 20-year annualized performance is only 87 basis points (0.87 percentage points) better than the next best performer, yet over 20 years a $10,000 initial investment in that fund ended up worth $31,266 more than that of the runner up.

A differential in returns of less than a percentage point rewarded investors with a holding worth a total of 16.2% more -- $224,703 vs. $193,436 -- when held for 20 years. That's something to keep in mind before downplaying "minor" percentage differences in factors such as expense ratios when evaluating funds.