Vanguard Mutual Funds

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Vanguard Mutual Funds was the first fund reviewed in our series of articles covering families of mutual funds. We'll start this discussion by talking briefly about the history of Vanguard. Next, we'll provide an overview of their fee structures and investment returns. Finally, we'll review a list of the top rated mutual funds from Vanguard.

Vanguard Family of Funds

Vanguard is one of the world's largest investment companies, managing over $1.6 trillion in assets. The company has around 12,500 employees, and claims 9 million shareholder accounts. The corporate headquarters for Vanguard is in Valley Forge, Pennsylvania, but they have offices around the world, including Belgium and Japan.

Additional Resources

Individual investors opening an account with the Vanguard family of funds has access to an impressive selection of mutual funds, exchange traded funds, or ETFs, stocks, bonds, and even non-Vanguard funds. With Vanguard you can expect full service financial planning, including 529 plans to help you save for college expenses as well as retirement planning such as IRAs. Vanguard currently claims to offer over 170 domestic mutual funds, and an additional 40 funds investing in the international markets.

Vanguard Fee Structure and Returns

Generally, Vanguard mutual funds are well known for their very low fee structure. Mutual fund rating sources such as Morningstar note that Vanguard's operating expenses are considered well Below Average relative to the industry. The largest holding of assets at Vanguard funds, over 47%, is invested in domestic stocks. Over the past five years, the average fund return is 4.7% (May 2011).

The minimum investment an individual can make in any Vanguard mutual fund is $3,000, and all of their family of funds consists of no-load funds. This large offering of no-load mutual funds are tempting to the investor that understands the long-term impact mutual fund fees can have on their total return and growth of their investment.

Top Rated Vanguard Mutual Funds

The cornerstone of the Vanguard mutual fund family is the Vanguard 500 Index fund. With total assets over $109 billion, the Vanguard 500 Index is at times the largest mutual fund in the world, at one time sharing this honor with Fidelity's Magellan Fund. The Wellington Fund is another well known Vanguard mutual fund, and Wellington holds the honor of being the first mutual fund established at Vanguard.

Looking at the Morningstar ratings of Vanguard's mutual funds, the top rated funds in 2011 include:

Vanguard Wellesley Income Inv (VWINX) - with nearly $21 billion in assets, this large value mutual fund provides the investor with a mix of stocks and bonds. The fund's focus is on the industrials, consumer defensive, and energy sectors of the economy. Top holdings include Chevron Corporation, Merck & Co, Inc., and Home Depot Inc. The fund boasts a low expense ratio of 0.28%. The fund requires a minimum investment of $3,000. The average return over the last five years was 6.98%. (May 2011)
Vanguard Dividend Growth Inv (VDIGX) - with over $5 billion in assets, this large blend mutual fund invests primarily in industrials and consumer defensive sectors of the economy. Top holdings include Morgan Triparty Mortgage, Automatic Data Processing, and BG Group PLC.. This no-load mutual fund has an expense ratio of 0.34%, and requires a minimum investment of $3,000. The average return over the last five years was 5.70%. (May 2011)
Vanguard Wellington Inv (VWELX) - with nearly $57 billion in assets, this large value mutual fund's investments are spread across the financial services, healthcare, industrials, and energy sectors of the economy. Top holdings include AT&T, Inc., ExxonMobil Corporation, and Chevron Corporation. This no-load mutual fund has an expense ratio of 0.30%. The average return over the last five years was 5.97%. (May 2011)

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