Vanguard, founded in 1975, is one of the world’s largest investment companies. The company provides various choices of funds such as no-load, low-cost mutual funds as well as other financial services. Currently, the company owns about $6.2 trillion global assets under management. Nearly 17,600 employees, both in the United States and abroad, are working for Vanguard. The core purpose of the company is to take a stand for all of its investors, treat them fairly and offer them the best options for investment success.
Major types of mutual funds
Vanguard offers a variety of mutual funds. You can figure out the right kind and start your investment.
Individual Retirement Account (IRA)
If you or your partner has a stable job and earns good income, you may choose an IRA to get prepared for a financially comfortable retirement. The minimum cost of opening an individual retirement account is usually $1,000. Specifically, the IRA has three types: traditional IRA, Roth IRA, and Rollover IRA. Since each type has its own advantage, you may compare them and select the most suitable for you.
An index fund can help you track or match the components of a financial market index. With this fund, you can get exposed to a wider market and have low portfolio turnover and operating expenses. Although index funds follow a relatively passive investment strategy, they tend to be regarded as an ideal core portfolio holdings for retirement accounts.
529 Savings Plans
A 529 savings plan enables you to save money for your children’s education and enjoy other benefits. The 529 plan is an investment account usually sponsored by states. With such a plan, you can receive tax deductions and enjoy tax-deferred growth as well as tax-free withdrawals. As many 529 savings plans provide all-in-one portfolios, which automatically re-balance and change the asset mix based on your children’s ages, you can save much time in terms of managing investments.
Advantages of Vanguard mutual funds
Less Risks with More Diversification
One single mutual fund can invest in hundreds or even thousands of various individual securities among different companies, regions and sectors almost at once. This can greatly spread and reduce risks because the portfolios are diversified. Therefore, if any one of the security does poorly, the others are ready to help offset the risks.
Managing mutual funds requires adequate education, excellent skills as well as abundant resources. It is not an easy task for common people. Fortunately, it is not necessary for you to keep track of every security of your mutual fund. The mutual fund will be managed by professional managers who can help you decide how to invest money wisely.
Buying and selling mutual fund shares can be convenient. You can just do it online or by the phone. You may also set up automatic investments and withdrawals.