U.S. markets lack shine after a solid rebound in 2024. Investors are concerned due to stagflation risks fueled by President Donald Trump's aggressive tariff policies that can escalate to a severe global trade war. Analysts are expecting inflation to rise again in 2025 due to Trump’s aggressive fiscal, trade and immigration policies. Higher inflation will leave less room for the Federal Reserve to lower interest rates further.

The Federal Open Market Committee has kept the borrowing rates unchanged in line with market expectations. After the meeting on March 19, 2025, Fed Chairman Jerome Powell commented that the central bank is still committed to its initial revised guidance of two rate cuts in 2025 and will likely lower the key interest rates by a half-percentage point by the end of this year in case of slowing economic growth and downturn in inflation.

The Consumer Price Index (CPI) in February was much cooler than expected. Inflation in February increased by 0.2% after a 0.5% rise in January. On an annual basis, CPI fell 2.8% compared to 3% in the previous month. Retail sales increased by 0.2% in February against a revised decline of 1.2% in January despite worries over economic slowdown and rising inflation. Consumer sentiment for March decreased to 57.9 from 64.7 reported in February as per a report published by the University of Michigan.

In such a volatile market situation, mutual fund investing can help those who wish to diversify their portfolio among various asset classes. Investors who lack professional expertise in managing funds can choose to invest in Vanguard mutual funds such as Vanguard Energy (VGENX Quick QuoteVGENX - Free Report) , Vanguard Growth and Income Fund (VQNPX Quick QuoteVQNPX - Free Report) , Vanguard US Growth (VWUSX Quick QuoteVWUSX - Free Report) and Vanguard Equity Income (VEIPX Quick QuoteVEIPX - Free Report) as they provide low-cost, uncomplicated equity, fixed-income and multi-asset funds that can help investors meet their goals.

These funds have wide exposure in sectors such as finance, industrial cyclical, technology, retail trade, non-durable, and health since they have given a positive return and are expected to perform well in the near future.

Why Invest in Vanguard Mutual Funds?

Vanguard, one of the world’s largest asset management corporations, was founded by John C. Bogle on May 1, 1975. Headquartered in Vally Forge, PN, the company had $10.1 trillion in assets under management globally till Sept. 30, 2024. Vanguard had more than 20,000 employees worldwide and offered 208 funds in the United States and 215 in foreign markets to 50 million investors as of the same date.

Vanguard is owned entirely by funds, a unique feature among mutual fund firms. According to the company, this structure allows management to focus more on shareholder interests. Among the most significant advantages, Vanguard claims to offer low-cost, no-load funds. This means that the fund doesn’t charge investors when fund shares are being bought or sold.

These funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio of less than 1%. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Vanguard Energy fund invests most of its net assets in common stocks. VGENX advisors generally invest in companies principally engaged in the energy industry, such as exploration, production, and transmission of energy or fuels, as well as the manufacturing and servicing of products required for energy research, energy conservation, and pollution control.

G. Thomas Levering has been the lead manager of VGENX since Jan. 15, 2020. Most of the fund’s exposure was in companies like Exxon Mobil (9.5%), Shell PLC (8.8%) and Sempra (4.6%) as of Oct. 31, 2024.

VGENX’s three-year and five-year annualized returns are 12.8% and 11.3%, respectively. VGENX has an annual expense ratio of 0.44%.

To see how this fund performed compared to its category and other 1, 2 and 3 Ranked Mutual Funds, please click here.

Vanguard Growth and Income Fund invests most of its net assets in stocks that provide dividend income as well as the potential for capital appreciation. VQNPX advisors use quantitative approaches to select a broadly diversified group of stocks with investment characteristics, such as those of companies listed on the S&P 500 Index, but are expected to provide a higher total return than that of the index.

Hal W. Reynolds has been the lead manager of VQNPX since Sept. 30, 2011. Most of the fund’s holdings were in companies like Microsoft (6.4%), NVIDIA (6.3%) and Apple (6%) as of Sept. 30, 2024.

VQNPX’s three-year and five-year annualized returns are 12.3% and 17%, respectively. VQNPX has an annual expense ratio of 0.35%.

Vanguard US Growth fund invests most of its net assets in securities issued by large-cap U.S. companies. VWUSX advisors choose to invest in companies that have above-average earnings growth potential and rational stock prices compared with future earnings.

Kathleen A. McCarrag her has been the lead manager of VWUSX since Feb. 21, 2014. Most of the fund’s exposure was in companies like NVIDIA (9.7%), Amazon.com (8%) and Microsoft (7.7%) as of Nov. 30, 2024.

VWUSX’s three-year and five-year annualized returns are almost 11.4% and 15.8%, respectively. VWUSX has an annual expense ratio of 0.32%.

Vanguard Equity Income fund invests most of its net assets in common stocks of mid and large-capitalization companies that, according to its advisor, are relatively undervalued. VEIPX advisors choose to invest in stocks that consistently pay out above-average levels of dividends.

Sharon Hill has been the lead manager of VEIPX since Feb. 26, 2021. Most of the fund’s exposure is in companies like JPMorgan Chase (3.8%), Broadcom(3.5%) and Johnson & Johnson (2.8%) as of Sept. 30, 2024.

VEIPX had three-year and five-year annualized returns are almost 9.7% and 13.6%, respectively. VEIPX has an annual expense ratio of 0.27%.

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