The 10 Highest Rated Mutual Funds For Your Estate Plan

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Contemplating death is not easy, and planning for one's death can be even harder. However, developing a comprehensive estate plan can give you the peace of mind knowing that your family is taken care of after you are gone.

Estate planning basically means your transferring your assets to others after your death, usually to a spouse and/or the next generation of dependents in your family, while attempting to minimize tax liability. Many estate plans not only have liquid assets, insurance policies and real estate, but also mutual funds. In fact, those who have inherited assets from an estate plan have said they have kept investments such as mutual funds, whereas they sold any inherited real estate right away.

A mutual fund is a type of investment that combines money from many investors and invests the money in stocks, bonds, and other forms of assets. There are "closed-end funds," which allow the buyer to have a limited number of shares, and "open-end funds," which have an unlimited number of shares. When you buy a mutual fund, you purchase a piece of the fund; you do not actually own any of the assets the mutual fund owns.

The main benefits of mutual funds are that they offer the diversification of owning numerous assets at once, and they are managed by a professional who knows how to analyze the market and make the best decisions for your money.

Although the market is always changing, the following mutual funds have the best present outlook that may bode well for an estate plan, in that they have the highest overall ratings from Morningstar, a leading provider of information on stocks, mutual funds, variable annuities, etc.:

T. Rowe Price Latin America (PRLAX - Latin American Stock)

With a low risk factor and above average return, this stock is given a four-star rating by Morningstar. Its three-month, one-year, three-year and five-year returns are 10.68%, 54.19%, 50.13%, and 29.24%. The fund normally invests at least 80% of assets in equities of issuers located in at least four Latin American countries, and management is expected to invest substantially in telephone companies of various Latin American countries. In some markets, the fund may purchase preferred stock because of its liquidity advantage over common stock.

Merrill Lynch Latin America I (MALTX - Latin American Stock)

Like T. Rowe Price, Merrill Lynch Latin America also has an above average return and is given a four-star rating by Morningstar, although it also comes with a high risk factor. Its three-month, one-year, three-year and five-year returns are 10.13%, 49.46%, 49.75% and 29.20%. The fund normally invests at least 80% of assets in Latin American equity and debt securities issued in Mexico, Central America, South America, or Spanish-speaking Caribbean islands.

U.S. Global Investors Global Res (PSPFX - Specialty-Natural Res)

The first on the list that is not Latin American Stock, this four-star fund has a high risk factor and an above average return. Its three-month, one-year, three-year and five-year returns are -.18%, 32.91%, 49.19% and 40.80%. The investment seeks long-term growth of capital plus protection against inflation and monetary instability, and normally invests at least 80% of its sector assets in the equity securities of companies within the natural resource sector, such as oil, gas, and basic materials.

Merrill Lynch Latin America A (MDLTX - Latin American Stock)

Not to be confused with Merrill Lynch Latin America I, this Latin American Stock has above average risk and average return, and is given a three-star rating by Morningstar. Its three-month, one-year, three-year and five-year returns are 7.54%, 49.10%, 49.37% and 28.88%. The fund normally invests at least 80% of assets in Latin American equity and debt securities issued in Mexico, Central America, South America, or Spanish-speaking Caribbean islands.

Fidelity Latin America (FLATX - Latin American Stock)

Also a Latin American stock, Fidelity Latin America has both an average risk and an average return and is given a three-star rating by Morningstar. Its three-month, one-year, three-year and five-year returns are 9.99%, 52.04%, 48.85% and 28.59%. The fund normally invests at least 80% of assets in securities of Latin American issuers and other investments that are tied economically to Latin America, and it usually invests in common stocks. The fund may invest up to 35% of total assets in any industry that accounts for more than 20% of the Latin American market.

Merrill Lynch Latin America C (MCLTX - Latin American Stock)

This Latin American stock has an above average risk and an average return and is given a three-star rating by Morningstar. Its three-month, one-year, three-year and five-year returns are 9.85%, 47.98%, 48.24% and 27.88%. The fund normally invests at least 80% of assets in Latin American equity and debt securities issued in Mexico, Central America, South America, or Spanish-speaking Caribbean islands.

Merrill Lynch Latin America B (MBLTX - Latin American Stock)

Also in the Merrill Lynch family, this Latin American stock is very similar to its "C" counterpart, with an above average risk and an average return, and is given a three-star rating by Morningstar. Its three-month, one-year, three-year and five-year returns are 9.83%, 47.96%, 48.20% and 27.88%. The fund also normally invests at least 80% of assets in Latin American equity and debt securities issued in Mexico, Central America, South America, or Spanish-speaking Caribbean islands.

Fidelity Advisor Latin America A (FLTAX - Latin American Stock)

For the non-risk taker, Fidelity Advisor Latin America A has both a below average risk and return, and is given a two-star rating by Morningstar. Its three-month, one-year, three-year and five-year returns are 10.10%, 52.07%, 47.62% and 27.59%. The fund normally invests at least 80% of assets in securities of Latin American issuers and other investments that are tied economically to Latin America, and it primarily invests in common stocks. The fund may invest up to 35% of total assets in any industry that accounts for more than 20% of the Latin American market.

Fidelity Advisor Latin America T (FLTTX - Latin American Stock)

Also for the non-risk taker, Fidelity Advisor Latin America T has both a below average risk and return and is given a two-star rating by Morningstar. Its three-month, one-year, three-year and five-year returns are 7.55%, 51.61%, 47.26% and 26.96%. Keeping with the Fidelity trend, the fund normally invests at least 80% of assets in securities of Latin American issuers and other investments that are tied economically to Latin America, and it primarily invests in common stocks. The fund may invest up to 35% of total assets in any industry that accounts for more than 20% of the Latin American market.

AIM European Small Company A (ESMAX - Europe Stock)

The only other stock on the list that is not Latin American Stock, this four-star fund has an above average risk factor and an above average return. Its three-month, one-year, three-year and five-year returns are -2.02%, 35.28%, 46.52% and 32.47%. It invests at least 80% of its assets in securities of small European companies that have a market capitalization at the time of purchase, and are no larger than the largest capitalized company included in the Russell 2000 index during the most recent 11-month period plus the most recent data during the current month. It may invest up to 35% of assets in European companies located in developing countries, and up to 20% of assets in securities exchangeable for or convertible into equity securities of European companies.

As with all investments, always seek professional guidance from your attorney and/or financial advisor, in order to create an effective investment plan.