His laser-like focus at Vanguard was on the interests on investors. To this end, he developed low-cost mutual funds that focused on indexing. Hey, why should investors spend high amounts on fees when many portfolio managers underperform the market?
Now, thanks to this legacy, Vanguard is a mutual fund investing powerhouse. There are $1.4 trillion in assets, with 160 U.S. funds and 50 international funds. And while many are strong, there are some that are standouts above the rest. Let’s take a look:
Vanguard International Growth (VWIGX)
Started in the early 1980s, the Vanguard International Growth Fund (MUTF: VWIGX) now has $18.8 billion in assets. The portfolio is diversified across the world, with 11.58% in the Americas, 53.81% in Europe and 34.61% in Asia. There is also 21.11% in emerging markets.The Vanguard fund is composed of a variety of best-of-breed international money managers, from firms like Schroder Investment Management, Baillie Gifford and M&G Investment Management. The general approach is to focus on high quality companies with strong growth prospects.
As should be no surprise, the expense ratio is only 0.49% and the turnover is 44%. Top holdings now include Baidu (NASDAQ: BIDU), Petrobras (NYSE: PBR) and SAP AG (NYSE: SAP).
Vanguard Small Cap Growth Index (VSGIX)
The MSCI U.S. Small Cap 1750 Index tracks the performance of a diverse set of small capitalization stocks in the US. It is widely followed and a good barometer of the category.If you want to invest based on this index, then a good mutual fund choice is the Vanguard Small Cap Growth Index Fund (MUTF: VSGIX), which has $8.8 billion in assets. True, there has been volatility — which is to be expected. Although, the index has a good amount of mid-cap stocks, which helps with the swings.
For the past three years, the average annual return was 10.33%. Top holdings include JDS Uniphase (NASDAQ: JDSU), Informatica (NASDAQ: INFA) and Brigham Exploration Company (NASDAQ: BEXP).