Founded in May 1975 by legendary investor John C. Bogle, the Vanguard Group has grown into one of the world’s leading investment management firms. Headquartered in Malvern, PA, Vanguard manages approximately $10.1 trillion in assets as of April 30, 2025.

In early 2025, Vanguard delivered perhaps its most investor-friendly move to date, across 87 of its funds. Spanning bond, equity, international and money market categories, it implemented the largest-ever reduction in expense ratios, lowering costs by between one and six basis points. This landmark fee cut underscores a central advantage of Vanguard’s philosophy — low costs that enhance long-term investor returns. Its unique ownership structure, where the company is owned by its funds rather than external shareholders, empowers Vanguard to prioritize investor outcomes above outside profit motives, enabling continued cost reductions and better alignment with shareholder interests.

Interest rates have not come down in 2025, as was expected earlier. Amid these higher interest rates and market volatility, Vanguard is also emphasizing its fixed-income offerings. The firm believes that bonds are well-positioned to provide attractive income and higher returns, especially if downside economic risks materialize. This strategic focus aligns with its view that the era of "higher-for-longer" interest rates will persist, setting the foundation for solid fixed-income returns over the next decade.

Thus, in 2025, buying Vanguard mutual funds remains a smart choice for both new and experienced investors due to their combination of low costs, broad diversification and a strong reputation for investor-first practices. Beyond low fees, the funds offer built-in diversification across asset classes, sectors and global markets. Whether an investor is looking for U.S. large-cap exposure, international equities, or fixed-income options, Vanguard has a range of funds to match most investment goals.

Hence, it will be prudent to invest in Vanguard mutual funds if one is seeking stability and growth potential in a market that is expected to remain volatile for a while. Astute investors should consider such funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

We have thus selected three mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000, as well as carry a low expense ratio.

Vanguard Selected Value Fund (VASVX Quick QuoteVASVX - Free Report) invests primarily in undervalued stocks of mid-size U.S. companies. VASVX advisors define undervalued stocks as those that are out of favor with investors and are trading at prices below average in relation to measures such as earnings and book value. These stocks often have above-average dividend yields.

Richard Lawrence Greenberg has been the lead manager of VASVX since February 2005. The three top holdings for VASVX are AerCap (3%), Corebridge (1.9%) and Baxter International (1.8%).

VASVX’s 3-year and 5-year annualized returns are 14.3% and 17.2%, respectively, and its net expense ratio is 0.42%. VASVX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

Vanguard Wellington Investor Shares (VWELX Quick QuoteVWELX - Free Report) normally invests in dividend-paying and sometimes non-dividend-paying common stocks of established large companies. VWELX advisors also invest in fixed-income securities that they believe will generate a moderate level of current income. These securities include investment-grade corporate bonds.

Loren L. Moran has been the lead manager of VWELX since January 2017. The three top holdings for VWELX are Apple (4.4%), Microsoft (4.3%) and Nvidia (4%).

VWELX’s 3-year and 5-year annualized returns are 12.7% and 10.3%, respectively, and its net expense ratio is 0.25%. VWELX has a Zacks Mutual Fund Rank #1.

Vanguard Growth & Income Investor Shares (VQNPX Quick QuoteVQNPX - Free Report) invests in stocks that are included in the S&P 500 Index. Most of the stocks held by the fund provide dividend income as well as the potential for capital appreciation.

Hal W. Reynolds has been the lead manager of VQNPX since September 2011. The three top holdings for VQNPX are Nvidia (5.7%), Apple (5.4%) and Microsoft (5.2%).

VQNPX’s 3-year and 5-year annualized returns are 19.7% and 16.9%, respectively, and its net expense ratio is 0.38%. VQNPX has a Zacks Mutual Fund Rank #1.

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