Best Vanguard Funds for a Volatile Market: Vanguard Global Minimum Volatility (VMVFX)
Expenses: 0.25%, or $25 annually for every $10,000 invested
Minimum Initial Investment: $3,000
Investors looking to minimize risk through diversification in stocks of companies around the globe can consider holding Vanguard Global Minimum Volatility (MUTF:VMVFX).
VMVFX diversifies its holdings by investing in U.S. stocks and non-U.S. stocks that the fund management believes possess lower risk characteristics than relative market indices. The global allocation is 59% U.S. stocks, with the remainder in the Pacific (17%), Europe (16%), emerging markets (8%) and the Middle East (trace).
Top holdings in the portfolio are stocks in the mid- to large-cap range, so companies like RenaissanceRe Holdings Ltd. (NYSE:RNR), Waste Management, Inc. (NYSE:WM), and HDFC Bank Limited (ADR) (NYSE:HDB), although the fund also holds small caps.
Investors should keep in mind that, although VMVFX will typically outperform the average global fund in a down market, the fund will typically underperform in a rising market.