Buy These 3 Top-Ranked Vanguard Funds for 2022

Vanguard is one of the world’s largest investment management firms, founded by John C. Bogle in 1975. It serves clients all over the world with asset management and financial planning services and is one of the most trusted names when it comes to retirement plan administrators and individual investors.

There are ample reasons behind this, not the least of which is its longevity. The firm’s fee-conscious and forward-thinking approach to fund management has helped its customers achieve significantly higher investment returns than more traditional funds.

As of Jan 31, 2021, the organization had over $7.2 trillion in assets under management and offered nearly 209 domestic funds and 232 foreign market products. Moreover, Vanguard is unique among mutual fund firms because it is owned entirely by the funds. This structure, according to the company, allows management to focus more on shareholder interests. Vanguard claims to offer low-cost, no-load funds as one of its benefits.

Vanguard mutual funds have outperformed other similar mutual funds over time due to their low-fee management methodology. In fact, 178 of 199 Vanguard funds have outperformed their peer group average over the last decade.

The bulk of the family’s mutual funds has an initial investment of $0 to $3,000. None of the Vanguard mutual funds had any load as of Dec 31, 2021.

3 Best Funds to Buy Now

We have highlighted three Vanguard mutual funds Vanguard Wellington Fund Investor Shares VWELX, Vanguard New York Long-Term Tax-Exempt Fund Investor Shares VNYTX andVanguard Short-Term Treasury Fund Investor Shares VFISX. Each of these funds carries a Zacks Mutual Fund Rank #1 (Strong Buy). These funds have encouraging three and one-year returns. Additionally, the minimum initial investment is $3000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Vanguard Wellington Fund Investor Shares was incepted in July 1929 and is managed by Wellington Management Company. VWELX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. The goal of the fund is to provide income and long-term capital growth while minimizing capital risk. Vanguard Wellington Fund Investor Shares’ assets are split between common stocks and bonds, with 65% in equities and 35% in bonds on average.

Vanguard Wellington Fund Investor Shares invests the lion’s share of its assets in dividend-paying as well as non-dividend-paying common stocks of large-cap companies. VWELX also invests assets, to a lesser extent, in investment-grade corporate bonds and mortgage-backed securities.

Vanguard Wellington Fund Investor Shareshas a history of positive total returns for over 10 years. Specifically, VWELX’s returns over the three and one-year benchmarks are 11.9% and 9.9%, respectively. The fund has a 3-year and 5-year sharpe ratio of 1.01 and 0.90, respectively. Needless to say that a sharpe ratio of more than 0.5 over the long run generally leads to a market-beating performance. The annual expense ratio of 0.24% is lower than the category average of 0.84%.

As of Nov 30, 2021, Vanguard Wellington Fund Investor Shares had 21.88% of its assets invested in Total Corporate Bonds. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

Vanguard New York Long-Term Tax-Exempt Fund Investor Shares is managed by the Vanguard Group manages, which was founded in April 1986. VNYTX is classified in the Muni-Bonds segment by Zacks, which is an area full of possibilities. The fund’s goal is to generate a high level of income that is tax-free on both the federal and state levels. Vanguard New York Long-Term Tax-Exempt Fund Investor Shares primarily invests in high-quality, long-term municipal bonds issued by the state and local governments of New York, as well as regional government agencies.

Vanguard New York Long-Term Tax-Exempt Fund Investor Shares has a history of positive total returns for over 10 years. Specifically, VNYTX’s returns over the three and one-year benchmarks are 3.6% and 3.5%, respectively. Vanguard New York Long-Term Tax-Exempt Fund Investor Shares has a 3-year and 5-year sharpe ratio of 0.61 and 0.60, respectively. The annual expense ratio of 0.17% is lower than the category average of 0.81%.

Vanguard New York Long-Term Tax-Exempt Fund Investor Shares has 83.11% of its assets invested in Total Misc Bonds. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

Vanguard Short-Term Treasury Fund Investor Shares is managed by Vanguard Group. VFISX was incepted in October 1991. Vanguard Short-Term Treasury Fund Investor Shares is classified in the Zacks Govt Bond-Shortsegment. The fund’s goal is to generate a high level of interest income. VFISX invests in repurchase agreements, which are contracts in which a bank or securities dealer sells government assets and agrees to buy them back at a certain date and price. Vanguard Short-Term Treasury Fund Investor Sharesalso invests in classic derivatives such as futures and options contracts when they allow a transaction to be performed at a lower cost than purchasing genuine bonds.

Vanguard Short-Term Treasury Fund Investor Shares has a history of positive total returns for over 10 years. Specifically, VFISX’s returns over the three and one-year benchmarks are 1.8% and 1.4%, respectively. Vanguard Short-Term Treasury Fund Investor Shares has a 3-year sharpe ratio of 0.85. The annual expense ratio of 0.20% is lower than the category average of 0.64%.

Vanguard Short-Term Treasury Fund Investor Shares has 5.90% of its assets invested in US Treas Note Bond. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

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