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2 Vanguard Mutual Funds Worth a Look for Your Retirement

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The Vanguard Group was founded by John C. Bogle, well-known for his buy-and-hold investment strategies. The Vanguard Group is a mutual fund house widely known for its low-cost funds aimed at tracking a market index and not outdoing it.

Vanguard mutual funds have, time and again, given steady returns amid market upheavals. Vanguard mutual funds, in reality, have a high degree of diversification that helped them garner positive ratings. Additionally, Vanguard mutual funds’ expense ratios are mostly less than the industry averages, which indubitably made them popular among investors.

Vanguard mutual funds are also distinctively different from their peers. They primarily hire managers from outside, making it easier to shun the mutual funds if the manager fails to deliver. In this way, the Vanguard Group can control such funds’ costs.

Thus, let us look at two such low-cost Vanguard mutual funds that won’t burn a hole in your pocket, and are worth keeping an eye on. And since these are predominantly low-cost investment vehicles, they best suited for the long term and can be considered for retirement.

And, why mutual funds rather than stocks? Reduced transaction costs and portfolio diversification without the commission charges associated with stock purchases are the primary reasons investors should park their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Vanguard US Growth Portfolio (VWUSX - Free Report) , with a Zacks Mutual Fund Rank #3 (Hold), primarily invests in stocks of large U.S. companies that can generate robust earnings growth.

The Vanguard US Growth Portfolio, managed by Vanguard Group, carries an expense ratio of 0.29%, way lower than the category average of 0.99%. VWUSX, in terms of fees, is a no-load fund. So, from a cost standpoint, VWUSX is cheaper than its peers, while its minimum initial investment is $3000.

This Large Cap Growth fund, as of the last filing, allocates funds in three major groups, including Large Growth, Foreign Bond, and Small Growth.  Further, as of the last filing, Apple Inc. (AAPL - Free Report) , Microsoft Corporation (MSFT - Free Report) , and Amazon.com, Inc. (AMZN - Free Report) were the top holdings of VWUSX.

VWUSX has one-year and five-year returns of 9.1% and 10.2%, respectively. VWUSX’s performance, as of the last filing, when compared to funds in its category, was in the top 7% in a year and in the 25% over the past five years.

To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

Vanguard Lifestrategy Growth Fund (VASGX - Free Report) , with a Zacks Mutual Fund Rank #1 (Strong Buy), may invest a portion in fixed-income securities, but most of its investments are in common stocks.

The Vanguard Lifestrategy Growth Fund, managed by Vanguard Group, carries an expense ratio of 0.14%, way lower than the category average of 0.71%. VASGX, in terms of fees, is a no-load fund. So, from a cost perspective, VASGX is cheaper compared to its peers, while its minimum initial investment is $3000.

This Allocation Balanced fund, as of the last filing, allocates funds in three major groups, including Large Value, Large Growth, and Foreign Stock.  Further, as of the last filing, Vanguard Total Stock Mkt Idx Inv, and Vanguard Total Intl Stock Index Inv were the top holdings of VASGX.

VASGX has three-year and five-year returns of 7.5% and 5.8%, respectively. VASGX’s performance, as of the last filing, when compared to funds in its category was in the top 18% in a year, and in the 20% over the past five years.

By the way, Vanguard US Growth Portfolio and Vanguard Lifestrategy Growth Fund’s year-to-date returns are 22.9% and 6.3%, individually.

Zacks Investment Research


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