Founded by John C. Bogle in 1975, Vanguard is one of the world’s largest investment management companies. It offers about 190 domestic funds and 230 funds for foreign markets. It also offers asset management and financial planning services to clients throughout the globe. As of Jan 31, 2020, the company had more than 30 million investors in 170 countries.
Vanguard stands out from other mutual fund companies because it is owned by the funds themselves. The company believes that this structure helps management to focus more on its shareholder interests. Among the notable advantages Vanguard claims to offer include low-cost and no-load funds.
Meanwhile, Vanguard received $8 billion of inflows in May alone, on the back of brilliant fund performances from both its actively and passively managed products.
Which Fund Turned Out to be the Best?
By the end of the first half of this year, Vanguard had around $6.2 trillion of assets under management. The initial investment of the majority of mutual funds from the family ranges from $0 to $3,000. As of June 30, 2020, none of the Vanguard mutual funds carried any load.
Further, Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX – Free Report) turned up as one of the best performing mutual fund from the Vanguard family. The fund posted solid gains in the period between January and June. VWESX, which invests a bulk of its intermediate- and long-term investment-grade securities, returned 17.7% in the past year and has added 8% so far this year.
What Contributed to Overall Growth for Vanguard?
Vanguard invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments were made in the technology sector. In the cyclical sectors, the fund family invested the maximum in the financial services sector, while in defensive sectors it invested heavily in healthcare.
Technology Select Sector SPDR (XLK) has climbed 14.2% in the year to date period and 32% over the past year. The sector turned out the best performing sector among the 11 S&P 500 sectors.
3 Best Funds to Buy Now
Given such bullish circumstances, we have highlighted three Vanguard mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) and are poised to gain from such factors. Moreover, these funds have encouraging three and one-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Vanguard International Growth Fund Investor Shares (VWIGX – Free Report) fund seeks capital growth by investing in stocks of companies located outside the United States. These companies are expected to diversify their assets in countries across developed and emerging markets.
This Sector – Non US-Equity product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and one-year benchmarks are 10.9% and 23%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
VWIGX has an annual expense ratio of 0.43%, which is below the category average of 1.11%.
Vanguard LifeStrategy Growth Fund Investor Shares (VASGX – Free Report) fund invests in other Vanguard mutual funds with asset allocation of nearly 80% in equity securities and about 20% in debt securities and bonds. VASGX seeks appreciation of income and capital for the long run.
This Sector – Allocation Balanced product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and one-year benchmarks are 5.7% and 6.5%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
VASGX has an annual expense ratio of 0.14%, which is below the category average of 0.74%.
Vanguard Short-Term Investment-Grade Fund Investor Shares (VFSTX – Free Report) fund seeks income while maintaining a high degree of stability of principal. VFSTX invests in a variety of high-quality and, to a lesser extent, medium-quality fixed income securities. The fund also invests to a limited extent in non-investment-grade and fixed income securities, mainly short-term and intermediate-term corporate bonds.
This Sector – Inv Grade Bond-Short product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the three and one-year benchmarks are 3.1% and 4.6%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
VFSTX has an annual expense ratio of 0.20%, which is below the category average of 0.73%.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>