Best Robinhood mutual funds with top performance in 2019: Index funds, Target Retirement, US\International Small\Mid\Large cap funds.

Mutual Funds on Robinhood

Unfortunately, Robinhood Financial right now does not offer investing in mutual funds. Another top-rated $0-commission broker - Firstrade - does offer close 10,000 mutual funds from all major fund families.

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The Following Security Types Are Not Supported on Robinhood:

Foreign-Listed Stocks & ETFs

As the name implies, foreign-listed stocks and ETFs are just stocks that trade on an exchange outside of the U.S. U.S. investors might choose to add these to their portfolio to achieve more international exposure. Foreign stocks are not currently offered on the app, however Robinhood users can achieve this exposure through other means, such as buying ADRs or ETFs that track foreign markets.

Select OTC-Listed Stocks

Stocks that trade on the Over the Counter Exchange (OTC) are generally of smaller, less established companies that don’t need to comply with many of the regulations that companies on the larger exchanges need to follow, such as publishing audited quarterly financials. These stocks often trade at less than a dollar (hence the nickname “penny stocks”) and are less liquid than their more established counterparts that trade on the major U.S. exchanges. These qualities generally result in OTC stocks being more volatile and risky, and is why most mutual funds avoid them. If you are aware of these risks and looking to add them to your portfolio, you should be aware that Robinhood doesn’t offer all OTC stocks on its platform.

Preferred Stocks

Preferred stocks have characteristics of both common equity and bonds, and their risk-level is therefore generally considered higher than that of bonds but less than that of common stock. Preferred equity represents preferred ownership in a public company, meaning that in the event of bankruptcy, preferred equity holders would get paid before investors in the company’s common stock, but only after any bondholders are paid. Preferred stocks tend to pay a higher, consistent dividend, which makes them trade similarly to bonds, and it is for this reason that generally only larger, more established companies have preferred stock. Preferred equity is a great addition to many portfolios because of its lower risk relative to common stocks, and although Robinhood doesn’t let you trade individual preferred stocks, you can still achieve diversified exposure to this asset class through preferred equity ETFs.


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Mutual Funds on Robinhood

Mutual Funds are pooled investment products that offer investors without deep pockets a cost-effective way to buy ownership in a basket of hundreds of different stocks using a single security. Some mutual funds are passively managed whereas others are actively managed and charge owners a management fee. Robinhood doesn’t offer mutual funds on its platform but the performance of many passive mutual funds can often be easily replicated using ETFs.

Bonds

Bonds, and fixed income in general, are an essential part of any multi-asset class strategy. Unlike stocks, bonds don’t represent ownership in a company, but are simply agreements where the bondholder is generally entitled to recurring coupon payments along with the par value of the bond upon its maturity. There are many different types of bonds, from emerging government bonds to corporate bonds, all with different risk levels and returns. Although these instruments are not included in Robinhood’s platform, investors can still gain broad exposure to the basic fixed income markets through ETFs that invest in the bond markets.

Futures

Futures are a type of derivative that represents an agreement to buy/sell an underlying asset, including stock indices, commodities, and currencies, at a predetermined price and date in the future. They are considered a leveraged instrument because the cash required to enter into a futures trade is small relative to the size of the position’s actual exposure. The day-to-day performance of most futures contracts tracks that of its underlying asset very closely. One of the major selling points of most futures markets is that they’re open almost 24 hours a day, allowing investors to act on new information and make changes to their portfolio’s exposures even after the cash markets have already closed for the day.


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