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4 Best Vanguard Mutual Funds for May

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Vanguard is counted among one of the top investment companies around the world, thanks to the wide range of investment options it offers its clientele. The investment company offers a vast pool of low-cost mutual funds, exchange-traded funds, advice, and related services. Vanguard’s diverse services are offered from its 19 offices located in major cities around the globe.

This is How Vanguard Has Fared So Far in 2020

Considering the strained economic scenario this year because of the coronavirus pandemic, Vanguard’s investments have fared decently till now. The fund house’s assets under management as of Jan 31, 2020 were about $6.2 trillion. The reason behind this impressive figure is the performance of its many investments and the low expense ratio of its mutual funds.

Vanguard strongly believes in its client-owned structure, which allows the fund house to offer mutual funds at costs that are quite lower than the average industry standards. To put things into perspective, the fund house offered an average expense ratio of 0.10% in 2019 (U.S. asset-weighted fund expenses as a percentage of 2019 average net assets). The figure is much lower than the industry's corresponding average (excluding Vanguard) of 0.57%.

The company, headquartered in Valley Forge, PA, has more than 30 million investors globally. These investors were based across 170 countries, as of Jan 31, 2020. As of the said date, the fund house had about 190 U.S. funds (comprising variable annuity portfolios) and 230 additional funds in non-U.S. markets. The company has about 17,600 employees in the United States and abroad.

In fact, taking a closer look at the house’s top-performing funds over the past year, one may note that Vanguard Long-Term Treasury Fund Investor Shares (VUSTX) and Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX) gained the most, with respective returns of 31.8% and 14.8%. Both of these funds carry a Zacks Mutual Fund Rank #2 (Buy).

4 Best Funds to Buy

We have, therefore, selected four Vanguard mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). In addition, the minimum initial investment for these funds is within $5,000.

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 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 Zacks sector – Large Cap Growth has a history of positive total returns for more than 10 years. 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 1.05%. The fund’s returns are 12.6% over the 3-year and 9.9% of the 5-year period. VWUSXhas a minimum initial investment of $3000.

Vanguard International Growth Fund Investor Shares (VWIGX - Free Report) seeks to provide long-term capital growth to its investors. The fund invests the majority of its assets in securities of companies located outside the United States. The fund invests across all market-capitalizations.

This Zacks sector – Non Us-Equity has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

VWIGX has an annual expense ratio of 0.43%, which is below the category average of 1.11%. The fund’s returns are 7.1% over the 3-year and 5.8% of the 5-year period. VWIGX has a minimum initial investment of $3000.

Vanguard Wellington Fund Investor Shares (VWELX - Free Report) aims for capital growth and modest current income. The fund invests the majority of its assets in dividend-paying common stocks of large companies. The fund invests a lesser part of its assets in securities of non-dividend-paying companies as well.

This Zacks sector – Allocation Balanced has a history of positive total returns for more than 10 years. 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 0.82%. The fund’s returns are 4.2% over the 3-year and 5.2% of the 5-year period. VWELX has a minimum initial investment of $3000.

Vanguard Health Care Fund Investor Shares (VGHCX - Free Report) aims for long-term capital growth. The fund invests the majority of its assets in securities of companies engaged in various activities in the healthcare industry. The fund invests in securities of both U.S. and non-U.S. issuers alike.

This Zacks sector – Health has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

VGHCX has an annual expense ratio of 0.34%, which is below the category average of 1.24%. The fund’s returns are 6.2% over the 3-year and 3.9% of the 5-year period. VGHCX has a minimum initial investment of $3000.

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