In the mutual fund industry, Vanguard founder Jack Bogle is a legend. After college, he got a job at Wellington Management Company and quickly rose up the ranks, becoming the company’s chairman. However, he was eventually fired because of a bad merger. But this turned out to be fortuitous since he started the mutual fund giant Vanguard in 1974.
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.
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.