3 Top Vanguard Mutual Funds of This Year to Keep an Eye On
Vanguard, which is one of the world's largest investment management firms, was founded by John C. Bogle in 1975. Headquartered in Vally Forge, PN, it has $7.7 trillion of assets under management globally as of Apr 30, 2023. The company had more than 20,000 employees globally on Dec 31, 2022, and offers 205 funds in the United States and 216 in foreign markets.
Vanguard is owned entirely by funds — a unique feature among mutual fund firms. According to the company, this structure allows management to focus more on shareholder interests. Among the most significant advantages, Vanguard claims to offer low-cost, no-load funds. This means that the fund doesn’t charge investors when fund shares are being bought or sold.
Mutual fund investing is preferred by investors who wish to diversify their portfolio among various asset classes but lack professional expertise in managing funds. Vanguard mutual funds should be good investment choices since they provide low-cost, uncomplicated equity, fixed-income and multi-asset funds that can help investors meet their goals.
We have thus selected three Vanguard mutual funds that have wide exposure in sectors like industrial cyclical, technology and consumer durables since they have given a positive return and are expected to perform well in the near future.
Inflation has started to stabilize as the U.S. Consumer Price Index (CPI) for the month of November came in at 3.1%. CPI rose modestly by 0.1% in November due to an increase in the rental cost. Investors’ confidence will likely get a boost as the central bank indicated that it would ease its monetary policy outlook in 2024. Such moves will certainly impact corporate profitability in a positive way.
These funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive year-to-date, three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio compared to the category average. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Vanguard Whitehall Funds, Selected Value Fund VASVX invests most of its net assets in common stocks of mid-cap domestic companies, which, according to its advisors, are undervalued and often have above-average dividend yield. VASVX advisors consider undervalued stocks as those that are out of favor with investors and are trading at below-average prices in relation to measures such as earnings and book value.
Richard Lawrence Greenberg has been the lead manager of VASVX since Feb 24, 2005. Most of the fund’s exposure was in companies like AerCap (3.4%), TE Connectivity (1.8%) and Global Life (1.7%) as of Jul 31, 2023.
As of Nov 30, 2023, VASVX had year-to-date, three-year and five-year annualized returns of almost 15.4%, 13.2% and 10.6%, respectively. VASVX has an annual expense ratio of 0.43%, which is less than the category average of 1.01%.
To see how this fund performed compared to its category and other 1, 2 and 3 Ranked Mutual Funds, please click here.
Vanguard Windsor II Investor VWNFX fund invests most of its net assets in common stocks of large and mid-cap domestic companies, which, according to its advisors, are undervalued. VWNFX advisors consider undervalued stocks as those that are out of favor with investors and are trading at prices below average in relation to measures such as earnings and book value.
Andrew D. Lacey has been the lead manager of VWNFX since Jan 7, 2007. Most of the fund’s exposure was in companies like Microsoft (5.8%), Alphabet (3.1%) and Amazon.com (2.0%) as of Jul 31, 2023.
As of Nov 30, 2023, VWNFX had year-to-date, three-year and five-year annualized returns of almost 14.8%, 10.4% and 11.5%, respectively. VWNFX has an annual expense ratio of 0.34% compared to the category average of 0.94%.
Vanguard Strategic Small-Cap Equity Investors VSTCX fund invests most of its net assets in small-cap U.S. companies, which, according to the advisor have right balance between strong growth prospects and reasonable valuations relative to their industry peers. VSTCX advisors use quantitative techniques to evaluate all of the securities using MSCI US Small Cap 1750 Index as benchmark index, with a risk profile similar to that of the index.
Cesar Orosco has been the lead manager of VSTCX since Feb 26, 2011, and most of the fund’s exposure is in companies like EMCOR Group (0.9%), Ionis Pharmaceuticals (0.8%) and Eagle Materials (0.8%) as of Sep 30, 2023.
As of Nov 30, 2023, VSTCX had year-to-date, three-year and five-year annualized returns of almost 7.1%, 10.3% and 7.7%, respectively. VSTCX has an annual expense ratio of 0.26% compared to the category average of 1.03%.
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