The Vanguard Growth Index Fund Investor Shares (VIGRX) may not be the first open-ended mutual fund that comes to mind in the current market volatility.
But it should be.
The point is, this fund, captained by Gerard O’Reilly since 1994, is the blue-blood fund of blue chip growth. This is the kind of fund you can buy into for long-term growth and be sure that fees aren’t eating up your returns or performance isn’t going to be volatile.
If you look at a chart of its performance since 2008, you see a steady march up to its current highs, with only slight, short-term setbacks along the way.
Currently, we’re in one of those ‘consolidation’ periods, as the broad markets have sold off markedly in 2016. But this is a time to take advantage of current pricing and not shy away from VIGRX.
VIGRX Makes Smart Decisions
The fund is currently focused on blue chip tech, with its top five holdings representing about 15% of its total holdings. And those five names are Apple Inc. (AAPL), Facebook Inc (FB), Alphabet Inc A and C shares (GOOG, GOOGL) and Amazon.com, Inc. (AMZN).
Say what you like about the broad market, these companies have been faring better than your average stocks and the businesses underneath them continue to defy the odds in this market.
If you look at the rest of the stocks that round out the VIGRX top 10, it starts to become clear that O’Reilly isn’t holding these names because of their tech but as a play on the U.S. consumer.
The other stocks in the top 10 include, The Coca-Cola Co (KO), Visa Inc (V), Home Depot Inc (HD), Walt Disney Co (DIS) and Philip Morris International Inc. (PM). All of these are plays on the domestic consumer, save PM, which sells tobacco-related products everywhere but the U.S.
This is about the growth of the U.S. economy. And all these companies have been getting stronger, as they already have done the hard work of adjusting their businesses for a less-than-robust economic climate.
And this isn’t something new for the fund. VIGRX has been able to produce even during these tough times. It has a three-year annualized return of 10.8% and a five-year annualized return of 10% according to Morningstar.
And the other nice thing is, VIGRX is part of the Vanguard family, which means very low management fees; in this case, a mere 0.23%. That means even in lean years, your gains aren’t being eaten by managers who are struggling to do their job.
O’Reilly’s long tenure is also indicative of his ability to perform over the long haul, as well as Vanguard’s dedication to substance over sizzle for VIGRX. There are plenty of fund companies that would have swapped managers a dozen times since 1994, with likely worse results.
Again, when things start looking a bit crazy, that is the perfect time to look for calm and not strike out with the stampede.
And VIGRX is a very good way to do just that.
Richard Band’s Profitable Investing advisory service helps retirement savers outperform the market without losing a minute of sleep along the way. His straightforward style and low-risk value approach has won seven Best Financial Advisory awards from the Newsletter and Electronic Publishers Foundation.
