Vanguard Actively Managed Common Stock Fund
As actively managed stock funds can either outperform or underperform an index, fund or portfolio managers use a strategy to combine extensive market research with their experience and forecasting activities.
One of the actively managed stock funds Vanguard has in its mutual fund family is known as “Vanguard Dividend Growth Fund”. This fund tends to invest in all those high-quality companies that pay growing dividend payments while this fund attempts to outperform the stock market index. From 2007 to 2009, this fund lost only forty two percent while the overall stock market lost fifty five percent due to plunge in the S&P index .
Vanguard Dividend Growth Fund invests in forty four high-quality dividend paying companies that include the names of Microsoft Corporation, NIKE Incorporated, United Parcel Service Incorporated, Costco Wholesale Corporation and Colgate-Palmolive Company and others. These companies form twenty eight percent of the total asset value of $26.1 billion of Vanguard Dividend Growth Fund.
The minimum amount required as an investment into Vanguard Dividend Growth Fund is $3,000 and clients are charged no purchase and redemption fees. Vanguard Dividend Growth Fund aims to outperform S&P index. This fund is particularly suitable to investors who wish to have long-term and well-balanced investment portfolio while considering exposure to dividend paying companies. Moreover, investors who wish that their mutual fund income should grow over time while their long-term invested capital is appreciated; Vanguard Dividend Growth Fund is one of the feasible selections for them.
Vanguard Fixed Income Fund
This mutual fund category tends to reward investors by exposing their invested capital to high-yield tax-exempt bonds as well as long-term tax-exempt municipal bonds. Their investment risk ranges from low to moderate potential concerning risk and reward.
Vanguard High-Yield Tax-Exempt Fund offers moderate risk due to which its credit quality is low. Resultantly, Vanguard High-Yield Tax-Exempt Fund provides higher fixed interest income to fund investors. Vanguard High-Yield Tax-Exempt Fund includes investments in 1315 bond securities with an average maturity of sixteen years. Vanguard High-Yield Tax-Exempt Fund has a total asset value of $9.7 billion and includes 35% of “A-Rated” bond issues. This fund also includes 29% (out of total 100% composition) of “AA-Rated” bonds.
Vanguard High-Yield Tax-Exempt Fund charges no purchase and redemption fee to its clients. This fund invests more than eighty percent net assets in municipal bond securities and it aims to outperform the Barclays Municipal Bond Index. Vanguard High-Yield Tax-Exempt Fund outperformed its benchmark by 0.83% by the end of December 31st, 2015. In last five years, from 2011 to 2016, Vanguard High-Yield Tax-Exempt Fund has outperformed the Barclays Municipal Bond Index by an average of 0.19% on a yearly basis.
Vanguard High-Yield Tax-Exempt Fund is fixed income fund that is suitable to all those investors who are in high-tax brackets and are willing to earn to earn fixed interest income by having appetite for moderate risk. If an investor’s fixed income portfolio is highly diversified, then, Vanguard High-Yield Tax-Exempt Fund is a good choice.
Vanguard Balanced Index Fund
This is known as a balanced fund because it is highly diversified to provide investors with investment returns from both the stock and bond securities. In other words, this fund invests sixty percent in stocks and roughly forty percent in bond issues to balance risk-reward potential. Vanguard Balanced Index Fund aims to track down those indexes that represent U.S. taxable bond and the U.S. equity markets.
Risk assumed in this fund is moderate since it balanced between equity and bond securities. The total assets of Vanguard Balanced Index Fund amount to $25.8 billion while investing in 3,105 shares and 6,293 bond issues for portfolio balancing or diversification. Largest holdings include Apple Incorporated, Alphabet Incorporated, Microsoft Corporation, Exxon Mobil Corporation, Johnson & Johnson, General Electric Company, Facebook and Procter & Gamble Company etc.
This type of fund is recommended to all those investors making investments a long-term perspective wanting capital appreciation and growth at the same time. Vanguard Balanced Index Fund is suitable to those investors who wish to have a balanced exposure to volatility in the equity and bond markets, as a core holding in investment portfolio.
Vanguard Global Minimum Volatility Fund
This kind of fund invest both in the stocks of U.S. and non- U.S. companies to reduce volatility in the worldwide equity marketplaces. To achieve an optimal balance, risk of the stock as well as its diversification characteristics are considered for hedging exchange rate fluctuations/exposure from international stock holdings. Vanguard Global Minimum Volatility Fund invests 55.70% of its total assets in North America and 22% in Europe as well as 14% in Asia Pacific .
As Vanguard Global Minimum Volatility Fund aims to hedge or limit international stock holdings driven by foreign currency exposure, it is recommended for all those investors who are not primarily interested to outperform any benchmark or index. This is because international market is driven by highly volatile global equity market where strong bullish activities and sharp downturns are frequent.
Vanguard Target Retirement Income Fund
This fund is aimed at making investments in both the stocks and bond issues, just as in Vanguard’s balanced funds. Vanguard Target Retirement Income Fund invests seventy percent in equity stocks whereas thirty percent is invested in bond issuances. In other words, Vanguard Target Retirement Income Fund provides variable as well as fixed income to its investors who have little tolerance for market volatility .
For investment in Vanguard Target Retirement Income Fund, investors need to have $1,000 in their portfolio. Total assets of Vanguard Target Retirement Income Fund are worth $10.1 billion with some portions (70% and 30%) invested in both the stock and debt issues of renowned organizations.
Vanguard Target Retirement Income Fund is recommended for all those investors who have retired in their profession and are willing to accept some income and capital appreciation from modest fluctuations in per share price. Normally, people who have attained the age of retirement wish that investments should be protected for losses. Therefore, they prefer little investment income and have lower tolerance for risk-reward potential than other investor groups. In this regard, retired people tend to prefer capital preservation investment strategy, and therefore, Vanguard Target Retirement Income Fund is a best strategic fit for making investments for this investor class.
References
Goldberg, S. (2014, April 02). Four Great Actively Managed Vanguard Funds. Retrieved March 23, 2016, from Kiplinger News: http://m.kiplinger.com/article/investing/T041-C007-S001-dan-wiener-says-choose-vanguard-managed-funds.html
Thune, K. (2015, July 10). 3 Best Vanguard Funds for International Stock. Retrieved March 23, 2016, from InvestorPlace Media: http://investorplace.com/2015/07/3-best-vanguard-funds-international-stock-vgtsx-vinex-vmvfx/4/
Waggoner, J. (2015, February 12). Retirement income funds can make withdrawals simple. Retrieved March 23, 2016, from U.S. News & World Report: http://www.usatoday.com/story/money/2015/02/12/retirement-income-funds/23187349/
