In this feature of Vanguard funds, we’ll highlight a set of four Vanguard large-cap value mutual funds that could each go well with wide variety of investment objectives.
Investors that buy value funds are usually looking to fill one of two basic types of investment objectives — a long-term growth objective or an income objective. The whole idea of investing, at least to the purists like Warren Buffett, is to buy and hold stocks that can increase their dividends over time and keep holding those stocks for years, not months. And it’s a bonus to buy those stocks at bargain prices.
The combination of long-term growth and current income give large-cap value mutual funds a broad appeal to smart investors. These investors also tend to be attracted to the low-cost, buy-and-hold nature of Vanguard large-cap value funds.
Vanguard Large-Cap Value Mutual Funds
Vanguard U.S. Value (MUTF:VUVLX): Vanguard’s VUVLX is unique in that it can hold stocks in a variety market sectors and of capitalization. The fund is broadly diversified, holding over 200 stocks, most of which are large-cap and mid-cap companies. And in true value nature, the fund adviser for VUVLX looks for stocks selling at bargain prices. The current yield is 2.1% and the expense ratio for VUVLX is 0.23%, or $23 annually for every $10,000 invested. The minimum initial investment is $3,000.
Vanguard Value Index (MUTF:VIVAX): This index fund from Vanguard is a great way to access large-cap value stocks at a low cost to the investor. VIVAX passively tracks the CRSP US Large Cap Value Index, which covers over 300 large-cap value stocks. The low turnover aspect of index funds fits nicely into the buy-and-hold tenet of value investing. The current yield is 2.3% and the expense ratio is 0.22%. The minimum initial investment is $3,000.
Vanguard Windsor (MUTF:VWNDX): The Windsor fund is one of the oldest and most revered large-cap value funds in the universe of investing. Opening to investors in 1958, the VWNDX management holds stocks that are often unloved by the market in the short-term but they believe will return to favor and prosper in the long run. The return since inception is over 11%, which is outstanding for a large-cap value fund. The current yield is 1.61% and the expense ratio is 0.3%. The minimum initial investment is $3,000.
Vanguard Windsor II (MUTF:VWNFX): Windsor II is not a clone of the original Windsor fund but the the two funds are similar in that they are both outstanding large-cap value funds. Windsor II tends to have a slightly higher yield, which is currently 1.99%, and it has average a higher number of holdings, which is now above 250 stocks. This step up in value approach and diversification could provide more downside protection in bear markets but it may also cause it to under-perform during bull markets. The expense ratio for VWNFX is 0.33% and the minimum initial investment is $3,000.
As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities. His No. 1 holding is his privately held investment advisory firm. Under no circumstances does this information represent a recommendation to buy or sell securities.