3 Best Performing Vanguard Mutual Funds from 1H21
Vanguard is one of the world’s largest investment management company, founded by John C. Bogle in 1975. It manages around $7.2 trillion in assets and offers nearly 160 domestic funds and 120 funds for foreign markets (as of Jan 31, 2021).
It offers asset management and financial planning services to clients throughout the globe. Unlike other mutual fund companies, Vanguard is owned by the funds themselves. This helps its management focus better on shareholder interests. Among other advantages, it claims to offer low-cost, no-load funds.
The initial investment of the majority of mutual funds from the family ranges from $0 to $3,000. As of Jun 30, 2021, none of the Vanguard mutual funds carried any load.
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. Among the cyclical sectors, the fund family has invested the maximum in the financial services sector, while among the defensive sectors it has invested heavily in healthcare.
Technology Select Sector SPDR (XLK) has climbed 14.3% in the last six months and 37.3% over the past year. The sector turned out as one of the best-performers among the 11 S&P 500 sectors.
3 Best Funds to Buy Now
We have highlighted three Vanguard mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy). 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 Wellington Fund Investor Shares VWELX seeks appreciation of capital in the long-term and generate moderate current income. The fund invests the lion’s share of its assets in dividend-paying as well as non-dividend-paying common stocks of large-cap companies. The fund also invests assets, to a lesser extent, in investment-grade corporate bonds and mortgage-backed securities.
This 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 13.3% and 25.9%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.
VWELX has an annual expense ratio of 0.24%, which is below the category average of 0.84%.
Vanguard Short-Term Investment-Grade Fund Investor Shares VFSTX 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 4.1% and 2%, 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%.
Vanguard LifeStrategy Growth Fund VASGX 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 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 13.2% and 31.9%, 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 0.77%.
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