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10 Best Funds for Young Investors

NEW YORK ( TheStreet Ratings) -- Ratings reviews the risk-adjusted return performance of around 25,000 funds every month. Young investors, with a very long investing time-horizon, can absorb more short-term risk in exchange for higher potential long-term returns.

Beyond building a base of lower-risk, core holdings, young investors can consider selecting a few riskier funds for their 2012 portfolio to juice their long-term results. The 10 funds listed below are among the highest ranked by performance regardless of risk. All these funds earned a, performance-based, reward grade of "A+".

Exchange-traded funds, open-end funds and traditional closed-end funds were considered for inclusion in this article. However, not all funds are suitable to be held for long-term returns. Therefore, short-term trading vehicles that employ as much as 300% leverage were excluded.

Funds charging high front end loads were also omitted as an important lesson to young investors, of all ages, that loads can be avoided by selecting a similar no-load fund.

Here are the 10 best for young investors:


10. Central Fund of Canada

Central Fund of Canada (CEF) provides an investment vehicle for investors interested in the benefits of gold and silver bullion. The fund invests primarily in long-term holdings of unencumbered, allocated, segregated and insured gold and silver bullion. The fund does not speculate with regard to short term changes in gold and silver prices.

Owning shares of the Central Fund avoids the inconvenience, as well as the high transactional and handling costs of directly owning gold and silver bullion. Currently at 53.5% gold bullion, 45.2% silver bullion, and 1.3% cash, the fund maintains a minimum of 90% of its net assets in gold and silver bullion.

If you decide that this traditional closed-end fund is a good fit for your 2012 portfolio, be mindful of the premium or discount embedded in the market price when timing your purchase.

Expense Ratio: 0.31%

Rated "A" by TheStreet Ratings:


9. SPDR S&P Retail ETF

SPDR S&P Retail ETF (XRT) has an investment objective to replicate the performance of an index derived from the retail segment of a U.S. total market composite index. The fund uses a passive management strategy designed to track the total return performance of the S&P Retail Select Industry Index.
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