Vanguard Mutual Funds

Vanguard Mutual Funds was the first review 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 $4.4 trillion in assets as of September 2017.  The company has around 13,500 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 the Netherlands, Australia, Hong Kong, England, Australia, France, Singapore, Japan, Canada and Switzerland.

Individual investors opening an account with the Vanguard family of funds have access to an impressive selection of mutual funds, exchange traded funds, or ETFs, stocks, bonds, and even non-Vanguard funds.  With Vanguard, investors can expect full service financial planning, including 529 plans to help 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 international markets.

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 45%, is invested in domestic stocks.  Over the past five years, the average fund return is 9.86% (September 2017).

The minimum investment an individual can make in any Vanguard mutual fund is $3,000, and all of their family consists of no-load funds.  This large offering of no-load mutual funds are tempting to the investor that understands the long-term impact 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 $341 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 offerings in 2017 include:

 

Vanguard Capital Opportunity Inv (VHCOX)

Assets: $15.3 billion
Category: Large Growth
Specialty: None
Top Three Holdings: Biogen Inc., Southwest Airlines Co. and Eli Lilly and Co.
Load: None
Minimum Investment: $5 million
Expense Ratio: 0.45%
5-Year Average Return: 19.75%

Vanguard MA Tax-Exempt Inv (VMATX)

Assets: $1.7 billion
Category: Municipal Bonds
Specialty: Massachusetts
Top Three Holdings: Massachusetts Municipal Bonds
Load: None
Minimum Investment: $200 million
Expense Ratio: 0.15%
5-Year Average Return: 3.07%

Vanguard OH Long-Term Tax-Exempt (VOHIX)

Assets: $1.2 billion
Category: Municipal Bonds
Specialty: Ohio
Top Three Holdings: Ohio Municipal Bonds
Load: None
Minimum Investment: $3,000
Expense Ratio: 0.15%
5-Year Average Return: 3.71%

 


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