5 Top Vanguard Mutual Funds to Buy Amid Volatile Market Conditions
Major U.S. indexes are lacking shine after a solid rebound in 2024. Market participants fear a potential slowdown in U.S. economy, rise in inflation rate, and an impending recession due to President Donald Trump’s reciprocal tariff policies, which have triggered a severe global trade war. However, renewed hopes that trade tensions between the United States and China could ease have brought some relief for investors.
Though inflation is still within the Federal Reserve’s acceptable range, Fed Chair Jerome Powell said that the central bank needed more clarity before making any policy adjustments, indicating a delay in further rate cuts. Contrary to the Fed’s opinion, President Trump wants immediate monetary policy easing to save the economy from slipping into a recession. The Producer Price Index (PPI) for final demand decreased by 0.4% in March. However, core PPI increased by 0.3%, indicating the ongoing price pressure. Retail sales in March were up 1.4%, beating the consensus estimate of 1.3%. Trade policy uncertainties, along with high chances of increasing inflation, would weaken the labor market, negatively impact business confidence, and stall economic growth.
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, Vanguard Growth and Income Fund VQNPX, Vanguard Equity Income VEIPX, Vanguard Selected Value VASVX and Vanguard Windsor Investor Shares VWNDX 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 $10 trillion in assets under management globallyas of December 31, 2024. Vanguard had more than 20,000 employees worldwide and offered 215 funds in the United States and 220 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 Shell PLC (9.3%), Exxon Mobil (8.6%) and Sempra (4.6%) as of Jan. 31, 2025.
VGENX’s three-year and five-year annualized returns are 12.8% and 19.7%, 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, such as NVIDIA (6.8%), Apple (6%) and Microsoft (5.5%) as of Dec. 31, 2024.
VQNPX’s three-year and five-year annualized returns are 8.6% and 18.7%, respectively. VQNPX has an annual expense ratio of 0.35%.
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 Broadcom(4.8%), JPMorgan Chase (4.5%), and Johnson & Johnson (2.7%) as of Dec. 31, 2024.
VEIPX had three-year and five-year annualized returns are almost 7.9% and 16.4%, respectively. VEIPX has an annual expense ratio of 0.27%.
Vanguard 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 (2.9%), Corebridge Financial(2%) and Gildan Activewear(1.9%) as of Oct. 31, 2024.
VASVX’s three-year and five-year annualized returns are almost 7% and 21.5%, respectively. VASVX has an annual expense ratio of 0.42%.
Vanguard Windsor Investor Shares fund invests most of its net assets in common stocks of large and mid-cap domestic companies, which, according to its advisors, are undervalued. VWNDX 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.
Richard S. Pzena has been the lead manager of VWNDX since Aug. 2, 2012. Most of the fund’s exposure was in companies like Wells Fargo & Company (2.6%), Morgan Stanley(2%) and Pfizer (1.8%) as of Oct. 31, 2024.
VWNDX had three-year and five-year annualized returns of almost 6.2% and 18.5%, respectively. VWNDX has an annual expense ratio of 0.36%.
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