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3 Best Vanguard Mutual Funds to Buy in January

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Vanguard is one of the world’s largest asset management corporations that manages around $3 trillion in assets. As of Jan 31, 2020, it offered nearly 190 domestic funds and 220 funds for foreign markets. It offers asset management and financial planning services to clients across the world.

Considering the current economic scenario due to the coronavirus pandemic, Vanguard’s investments have fared decently till now. Unlike other mutual fund companies, Vanguard is owned by the funds themselves, which helps its management focus better on shareholder interests. Among the other advantages, it claims to offer low-cost, no-load funds. Vanguard was founded by John C. Bogle in 1975.

Vanguard’s Performance So Far This Year

The fund house manages assets worth around $6.2 trillion. The initial investment of the majority of mutual funds from the family ranges from $0 to $3,000. As of Jan 31, 2020, 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 38.6% in the year-to-date period and 59.7% over the past year. The sector turned out the best-performer 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) that 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 Wellington Fund Investor Shares (VWELX - Free Report) 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 9% and 10.4%, 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 0.25%, which is below the category average of 0.83%.

Vanguard U.S. Growth Fund Investor Shares (VWUSX - Free Report) aims for long-term capital growth. The fund invests in securities of large-capitalization companies based in the United States that are considered to have more-than-average potential for growth in terms of earnings.

This Large Cap Growth 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 22.5% and 43.5%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

VWUSX has an annual expense ratio of 0.39%, which is below the category average of 1.04%.

Vanguard High-Yield Corporate Fund Investor Shares (VWEHX - Free Report) aims to offer high level of current income. The fund invests the majority of its assets in a diversified group of high-yielding, higher-risk corporate bonds, which have medium- and lower-range credit ratings. In fact, the fund mostly invests in corporate bonds that are rated below Baa by Moody's or have an equivalent rating by any other independent bond-rating agency. If the bonds are unrated, the fund’s advisor determines its quality before investing.

This High Yield-Bonds 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 4.3% and 2.9%, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

VWEHX has an annual expense ratio of 0.23%, which is below the category average of 1.00%.

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