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The 5 Best Vanguard Funds of 2014

Here's a look at the best of Vanguard's low-cost arsenal for the current market environment

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Vanguard 500 Index Fund

Assets: $28 billion
Expenses: 0.17%, or $1.70 on every $1,000 you invest
YTD Performance: +1.7%
10-Year Performance: An average of +7.6% per year.

What would the list of best Vanguard funds be without the good old Vanguard 500 Index Fund (VFINX) that started it all?

As the name implies, the 500 index fund faithfully tracks the Standard & Poor’s index of 500 large and respected U.S. blue chips. It’s perhaps the easiest and cheapest way to “buy the market” with an expense ratio of just 0.17%. That means a mere $1.70 in expenses for every $1,000 you invest.

Unsurprisingly, the top holdings are names investors know and love — Apple (AAPL), Exxon (XOM), Johnson & Johnson (JNJ) and other megacap U.S. companies.

There is a host of research out there that indicates passive, index-fund investing via a large-cap stock fund like the Vanguard 500 Index Fund is the most powerful and low-risk way to invest over the long-term.

So whether or not you’re the kind of trader that worries about sectors or emerging markets or short-term trends, have confidence in the VFINX fund as the bedrock of your portfolio for the long haul.

Read more about the Vanguard 500 Index Fund here.

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

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