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7 Best Vanguard Funds for the Return of Volatility

The best time to begin planning for volatility is when the market is calm. Start with this list of stalwart Vanguard funds.

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Best Vanguard Funds for a Volatile Market: Vanguard Tax-Managed Balanced (VTMFX)

municipal bonds
Source: Shutterstock

Expenses: 0.09%
Minimum Initial Investment: $10,000

Investors with taxable accounts can minimize taxes and volatility at the same time through tax-efficient diversification with funds like Vanguard Tax-Managed Balanced (MUTF:VTMFX).

VTMFX balances risk by allocating about 50% of fund assets to stocks and the other 50% to municipal bonds, which are exempt from federal income tax. Although the top stock holdings are mega-caps like Apple, Microsoft and Alphabet, and the median market cap leans even bigger at more than $70 billion, the fund also includes mid-cap stocks for some added diversification. They also provide lower dividend payments (relative to large caps), minimizing the tax hit.

So with VTMFX, investors get a rare combination of low expenses, broad diversification, and tax-efficiency. That’s a smart blend for volatile times.

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