5 Top Vanguard Mutual Funds to Add to Your Portfolio in 2026
The financial landscape of the United States remains resilient so far this year. Strong consumer spending, rising personal income, cooling inflation, and substantial investment in technology and innovation are fueling its growth. However, market participants fear that high interest rates and fresh geopolitical conflicts will prompt a more cautious outlook. As expected, the Federal Reserve has kept interest rates unchanged in the range of 3.5-3.75% in its January FOMC meeting.
The Personal Consumption Expenditures index, the Fed’s preferred inflation index, increased by 0.2% on a monthly basis through November, thanks to lower energy costs and better supply chains. Due to persistent high costs in the housing and healthcare sector, the annual inflation rate reached 2.8%, which is slightly above the Fed’s target of 2%. Interest rates is still high, which has made borrowing more expensive for the average American. The Fed has adopted a “wait-and-see” approach, signaling that rate cuts will only happen once inflation is fully under control.
U.S. GDP grew at an annual rate of 4.4% in Q3 2025, up from 3.8% in Q2. Although growth has slowed from earlier years, a solid job market and rising wages have helped the economy avoid a downturn. Consumer confidence fell sharply in January, dropping 9.7 points to 84.5, its lowest level since May 2014, as weaker labor conditions made households more cautious about spending. Job growth cooled in December, with nonfarm payrolls rising by 50,000 and the unemployment rate edging down to 4.4%. Wage growth accelerated, with average hourly earnings increasing 3.8% from the previous year. Overall, the U.S. economy seems to be in a “soft landing,” but its outlook depends on falling inflation and how the Fed handles interest rates going forward.
In such a 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, Vanguard Growth and Income Fund VQNPX, Vanguard Windsor II Fund VWNFX, Vanguard Whitehall Funds, Selected Value Fund VASVX and Vanguard Specialized Portfolios Energy Fund VGENX 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.
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 Dec. 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 has been the lead manager of VWUSX since Feb. 21, 2014. Most of the fund’s exposure was in companies like NVIDIA (11.8%), Microsoft (9.3%) and Amazon.com (7.4%) as of Aug. 31, 2025.
VWUSX’s three-year and five-year annualized returns are almost 30.3% and 8.5%, respectively. VWUSX has an annual expense ratio of 0.35%.
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 (8.6%), Microsoft (6.9%) and Apple (5.8%) as of Sept. 30, 2025.
VQNPX’s three-year and five-year annualized returns are 23.3% and 14.9%, respectively. VQNPX has an annual expense ratio of 0.39%.
Vanguard Windsor II Fund invests most of its net assets in common stocks of large and mid-cap domestic companies, which, according to its advisors, are undervalued but often have above-average dividend yields. VWNFX advisors consider 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.
Andrew D. Lacey has been the lead manager of VWNFX since Jan. 8, 2007. Most of the fund’s exposure was in companies like Microsoft (4.7%), Apple (2.9%) and Alphabet (2.7%) as of Oct. 31, 2025.
VWNFX’s three-year and five-year annualized returns of almost 17.9% and 12.9%, respectively. VWNFX has an annual expense ratio of 0.33%.
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 (2.5%), Corebridge Financial(1.6%) and Gildan Activewear(1.5%) as of Oct. 31, 2025.
VASVX’s three-year and five-year annualized returns are almost 14.2% and 12%, 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 (9.3%), Exxon Mobil (8%) and Marathon Petroleum (4.7%) as of Oct. 31, 2025.
VGENX’s three-year and five-year annualized returns are 13.2% and 18%, respectively. VGENX has an annual expense ratio of 0.45%.
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