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Fund Spy

Looking at Old Funds in New Ways

A fresh look at two Vanguard standbys.

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Below is an excerpt from the May issue of our Vanguard Fund Family Report. To view a risk-free trial issue, click here. Also note that Fund Family Reports for Fidelity and American Funds are available.

Morningstar divides the mutual fund universe into 70 distinct categories. We do so for a couple of practical reasons. First of all, it breaks down an overwhelming number of choices (there are currently more than 6,500 distinct mutual funds and exchange-traded funds) into more-manageable parts. Secondly, it helps us compare apples to apples when gauging performance and computing our Morningstar Ratings for funds.

But even though category labels are invaluable tools for navigating the vast mutual fund universe, a blind adherence to them can obscure the big picture and stifle creativity. So, in this article, I'd like to illustrate how you can "think outside the style box" by considering new ways to use two familiar funds.

Sonya Morris does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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