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