The financial landscape of the United States currently presents a nuanced picture. Strong consumer spending, rising personal incomes, and substantial investment in technology and innovation are fueling its growth. However, market participants fear that the overall pace of economic expansion is decelerating, prompting a more cautious outlook rather than expectations of a continued boom. A cooling labor market, persistent inflationary pressures, and instability driven by global trade tensions remain key concerns for investors.

The economy faces serious headwinds. To promote growth and counteract these challenges, the Federal Reserve implemented two consecutive 25-basis-point interest rate cuts in two months, bringing the new federal funds rate into the 3.75% to 4.00% range. The Fed’s preferred inflation metric, the Personal Consumption Expenditures (PCE) index, has remained above its 2% target for over four years the longest streak since 1995. Political instability has also taken its toll, leading to the longest government shutdown in history. Consumer sentiment dropped to a 3.5-year low of 50.3 in early November compared to a final reading of 53.6 in October. This stress is further reflected in the sharp slowdown in real GDP growth, which is forecast to reach only 1% this quarter, down from 3.8% in Q2.

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 U.s. Growth Fund (VWUSX Quick QuoteVWUSX - Free Report) , Vanguard Growth and Income Fund (VQNPX Quick QuoteVQNPX - Free Report) , Vanguard Whitehall Funds, Selected Value Fund (VASVX Quick QuoteVASVX - Free Report) and Vanguard Specialized Portfolios Energy Fund (VGENX Quick QuoteVGENX - 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 healthcare 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 Valley Forge, PN, the company had $11 trillion in assets under management globally as of July 31, 2025. Vanguard had more than 20,000 employees worldwide as of December 31, 2024, and offered 222 funds in the United States and 228 in foreign markets to millions of investors.

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 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%), Microsoft (8.7%) and Amazon.com (7.7%) as of May 31, 2025.

VWUSX’s three-year and five-year annualized returns are almost 30.2% and 11.6%, respectively. VWUSX has an annual expense ratio of 0.33%.

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, such as NVIDIA (7.2%), Microsoft (6.7%) and Apple (4.3%) as of June 30, 2025.

VQNPX’s three-year and five-year annualized returns are 24.7% and 16.8%, respectively. VQNPX has an annual expense ratio of 0.38%.

Vanguard Whitehall Funds, Selected Value Fund invests most of its net assets in common stocks of mid-cap domestic companies, which, according to its advisors, are undervalued and often have an above-average dividend yield. VASVX advisors consider undervalued stocks to be those that are out of favor with investors and trading at below-average prices in relation to measures such as earnings and book value.

Richard Lawrence Greenberg has been the lead manager of VASVX since Feb. 25, 2005. Most of the fund’s exposure was in companies like AerCap (3%), Corebridge Financial(2%) and Baxter International(1.4%) as of July 31, 2025.

VASVX’s three-year and five-year annualized returns are almost 19.4% and 17.5%, respectively. VASVX has an annual expense ratio of 0.36%.

Vanguard Specialized Portfolios 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 Shell PLC (9.4%), Exxon Mobil (8.2%) and Engie (4.7%) as of July 31, 2025.

VGENX’s three-year and five-year annualized returns are 17% and 20.1%, respectively. VGENX has an annual expense ratio of 0.45%.

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