Best Mutual Funds To Buy and Hold in Your Roth IRA

Weekend Images Inc. / iStock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

A Roth IRA is designed for long-term growth. Because qualified withdrawals are tax-free, the best mutual funds for a Roth IRA are typically those with strong growth potential, diversified exposure and higher expected long-term returns — even if they generate taxable income along the way.

According to the Internal Revenue Service, Roth IRA contributions are made with after-tax dollars, but qualified withdrawals of earnings are completely tax-free, making fund selection especially important for maximizing compounding over decades.

Rather than focusing on short-term performance, Roth IRA investors often prioritize low costs, broad diversification and growth-oriented strategies that benefit most from tax-free treatment.

At a Glance: Best Mutual Funds for a Roth IRA

Fund	Ticker	Primary Exposure	Risk Profile	Why It Stands Out
Vanguard Total Stock Market Index Fund	VTSAX	U.S. equities	Moderate to high	Broad exposure to U.S. stock market
Fidelity 500 Index Fund	FXAIX	Large-cap U.S. stocks	Moderate	Low-cost S&P 500 exposure
Vanguard Growth Index Fund	VIGAX	U.S. growth stocks	High	Strong long-term growth focus
Fidelity Contrafund	FCNTX	Actively managed equities	High	Long track record of growth investing
Vanguard Total International Stock Index Fund	VTIAX	International equities	High	Global diversification

Why Mutual Funds Work Well Inside a Roth IRA

Mutual funds are well-suited for Roth IRAs because they allow investors to reinvest dividends and capital gains automatically. According to the U.S. Securities and Exchange Commission, taxes on dividends and capital gains normally reduce long-term returns in taxable accounts — but those taxes don’t apply inside a Roth IRA.

This makes higher-growth and higher-turnover funds more attractive inside Roth accounts than in taxable portfolios.

Best Mutual Funds for Roth IRA Investing

Vanguard Total Stock Market Index Fund (VTSAX)

VTSAX provides exposure to thousands of U.S. stocks across large, mid and small-cap companies. According to Vanguard, the fund tracks the CRSP U.S. Total Market Index and carries a low expense ratio, helping maximize long-term compounding. Its diversification makes it a common core holding for retirement investors.

Fidelity 500 Index Fund (FXAIX)

FXAIX tracks the S&P 500 Index and offers ultra-low operating costs, according to Fidelity’s fund profile. The fund focuses on established U.S. companies that have historically driven long-term market growth. It’s often used as a foundational equity fund in Roth IRAs.

Vanguard Growth Index Fund (VIGAX)

VIGAX emphasizes U.S. companies with above-average earnings growth potential. According to Vanguard, the fund holds technology, consumer and healthcare leaders that reinvest profits to expand operations. Higher volatility makes it best suited for long-term investors with strong risk tolerance.

Fidelity Contrafund (FCNTX)

Fidelity Contrafund is an actively managed fund focused on growth-oriented stocks. Fidelity reports that the fund seeks companies with strong competitive advantages and long-term earnings potential. While expenses are higher than those of index funds, the Roth IRA structure helps offset tax inefficiencies from active management.

Vanguard Total International Stock Index Fund (VTIAX)

VTIAX provides exposure to developed and emerging markets outside the U.S. According to Vanguard, international diversification can reduce reliance on U.S. economic cycles over long time horizons. This fund complements domestic equity holdings in a Roth IRA.

How to Build a Roth IRA Fund Mix

According to research published by Vanguard, long-term portfolio performance is driven more by asset allocation than individual fund selection. Many Roth IRA investors combine:

• U.S. stock funds for growth
• International stock funds for diversification
• Bond funds only if nearing retirement

Younger investors often emphasize equities, while those closer to retirement may gradually add lower-volatility funds.

Risks to Keep in Mind

Mutual funds in a Roth IRA are still subject to market risk. According to the Federal Reserve, equity markets can experience extended downturns, even though long-term returns have historically been positive. Roth IRAs reward patience — frequent trading can undermine long-term performance.

Final Take to GO

The best mutual funds for a Roth IRA are those that maximize long-term growth, minimize costs and take full advantage of tax-free withdrawals. Broad market index funds, growth-focused funds and selective active strategies can all work well when aligned with your time horizon and risk tolerance. The most important factor is staying invested and allowing compounding to work over time.

Daria Uhlig contributed to the reporting for this article.

Data is accurate as of Jan. 20, 2026, and is subject to change.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

Share This Article: