Best Vanguard Funds for a Volatile Market: Vanguard Precious Metals and Mining (VGPMX)
Minimum Initial Investment: $3,000
When the market turns volatile, the investor herd often turns to the perceived safety of physical assets like gold. The Vanguard mutual fund to take advantage of this potential opportunity is Vanguard Precious Metals and Mining (MUTF:VGPMX).
Although VGPMX does not invest directly in gold or other precious metals, it does hold stocks of stocks — such as Franco Nevada Corp (NYSE:FNV), Barrick Gold Corp (USA) (NYSE:ABX) — and Newmont Mining Corp (NYSE:NEM) — that are involved in the precious metals mining industries.
Funds that are exposed to gold and other precious metals can be good diversification tools, which is to say that an allocation of 5% to 10% in a portfolio can be smart, but larger allocations can create excessive market risk for an investor.