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3 Vanguard Upgrades

3 Vanguard Upgrades

Russel Kinnel: Vanguard is a leader in costs and fund design, so they tend to draw high ratings from us. We recently upgraded three of their funds.

3 Vanguard Upgrades

These Vanguard funds earn a Morningstar Analyst Rating of Silver or Gold.

  1. Vanguard Short-Term Inflation-Protected Securities Index VTAPX
  2. Vanguard Extended Market Index VEXAX
  3. Vanguard Global Wellesley Income VGYAX

Vanguard Short-Term Inflation-Protected Securities Index is just about a perfect inflation hedge. TIPS adjust their value in response to changes in the Consumer Price Index. By limiting itself to short-term TIPS, the fund avoids most of the interest-rate risk in TIPS. In 2022, those risks were really realized as inflation and interest rates spiked at the same time, leaving long-term TIPS funds deep in the red. This fund’s overall rating is Gold.

We raised Vanguard Extended Market Index from Bronze to Gold. The fund targets the rest of the market left over after the S&P 500. Thus, you have a wide-ranging and very cheap fund. It works to complete a portfolio that already has an S&P 500 index fund, or you can just use it to gain low-cost exposure to small- and mid-caps even if you don't have the S&P 500. Finally, we raised Vanguard Global Wellesley Income VGYAX's Process rating from Average to Above Average, leading to an overall upgrade from Bronze to Silver. Vanguard launched this global version of the investor favorite Wellesley Income in 2017. The two funds are pretty similar, but the Global fund has a little more lower-quality debt and, of course, more global equities and bonds. Still, we're pleased with what we've seen in the process so far and how it's executed. As interest rates have risen, so has this fund's yield, making it a gem for income-oriented investors. Watch 3 Great Global Funds for more from Russel Kinnel.

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About the Author

Russel Kinnel

Director
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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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