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The 3 Best Vanguard Funds for Beginners in 2017

These Vanguard funds offer simplicity, diversification and low expenses

By Kent Thune, InvestorPlace Contributor

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Investors of all levels of experience can benefit from the power and simplicity of Vanguard funds.

The 3 Best Vanguard Funds for Beginners in 2017The low-cost, high-quality combination of Vanguard’s mutual funds makes them favorites among do-it-yourself investors, as well as fee-only investment advisors.

Vanguard funds are also outstanding choices for beginning investors. When you’re just starting out investing, it’s smart not only to look for diversified mutual funds, but also to find the best no-load funds with low expense ratios. Balanced funds and index funds also fit into this ideal mold of best fund types for beginners. This all makes Vanguard the best one-stop shop for beginning investors.

So with this framework in mind, we came up with three of the best Vanguard funds for beginning investors to buy.

Best Vanguard Funds for Beginning Investors: Vanguard Star Fund (VGSTX)

Best Vanguard Funds for Beginning Investors: Vanguard Star Fund (VGSTX)

Expenses: 0.34%
Minimum Initial Investment: $1,000

Beginning investors don’t often have a big lump sum to make their initial purchase, which is one of many reasons that Vanguard Star Fund (MUTF:VGSTX) is one of the best Vanguard funds for investors just getting their start.

The minimum initial purchase For VGSTX is just $1,000, which compares to $3,000 for the vast majority of Vanguard funds. The portfolio has a balanced asset allocation of roughly 60% stocks and 40% bonds. The underlying holdings consist of eleven actively managed Vanguard funds representing diverse categories.

For example, shareholders can get exposure to U.S. stocks with Vanguard Windsor II (MUTF:VWNAX), to long-term bonds with Vanguard Long-term Investment Grade (MUTF:VWESX) and international stocks with Vanguard International Growth (MUTF:VWIGX).

Best Vanguard Funds for Beginning Investors: Vanguard LifeStrategy Growth Fund (VASGX)

Best Vanguard Funds for Beginning Investors: Vanguard LifeStrategy Growth Fund (VGSTX)

Expenses: 0.15%
Minimum Initial Investment: $3,000

Beginning investors looking for an instant portfolio of top Vanguard index funds should take a look at Vanguard LifeStrategy Growth Fund (MUTF:VASGX).

One of three Vanguard funds in their LifeStrategy lineup, VASGX is a smart choice for long-term investors looking for a moderately aggressive mix of 80% stocks and 20% bonds.

The portfolio maintains a fixed allocation to four Vanguard index funds: Vanguard Total Stock Market Index (MUTF:VTSMX), Vanguard Total International Stock (MUTF:VTBNX), and Vanguard Total International Bond Index (MUTF:VTIBX).

Best Vanguard Funds for Beginning Investors: Vanguard 500 Index Fund (VFINX)

Best Vanguard Funds for Beginning Investors: Vanguard 500 Index Fund (VFINX)

Expenses: 0.16%
Minimum Initial Investment: $3,000

If you want to build a portfolio from scratch, one of the best Vanguard funds to do the job is Vanguard 500 Index Fund (MUTF:VFINX).

What could be better as a first fund for a beginning investor than the mutual fund industry’s first index fund for individual investors? When starting a portfolio of mutual funds, it’s smart to begin with a solid core fund that passively holds hundreds of large-cap U.S. stocks like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL).

When you’re ready to expand the portfolio around VFINX, there’s plenty of outstanding Vanguard funds to diversify the mix to suit your objectives and risk tolerance.

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 in Hilton Head Island, SC. Under no circumstances does this information represent a recommendation to buy or sell securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/01/3-best-vanguard-funds-for-beginners-2017-vgstx-vasgx-vfinx/.

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