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5 Funds That Should Fly on QE3

Utilities, financials and commodities among areas to target

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Vanguard Energy Fund

Vanguard mutual funds 401(k)Lastly, crude oil should get a boost from QE3. Besides the theoretical help from an improved economy, it should gain a currency lift similar to gold. Crude oil is denominated in U.S. dollars on global markets, so when the currency falls in value, the price of the commodity often increases.

There are many energy funds to choose from, but one standout option is Vanguard Energy Fund Investor Shares (MUTF:VGENX), which oversees $12 billion in assets. The fund’s portfolio manager is Karl Bandtel, who has been in charge for the past two decades.

Bandtel takes a conservative approach, which means investing in large-cap stocks; so naturally, VGENX’s top holdings include energy titans like Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and BP (NYSE:BP). The fund has gained 9% this year; well behind the average of 16% it has logged annually over the past 10 years.

As is customary with Vanguard funds, the VGENX has a fairly low expense ratio, this one coming to 0.34%. It also garners Morningstar’s highest rating of five stars.

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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