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A Steady Approach to the Energy Market

Jesse Dashefsky

Jesse Dashefsky: For investors willing to brave the energy market's ups and downs, Vanguard Energy is a solid choice. The fund's steady approach, abundant resources, and low fees earn it a Morningstar Analyst Rating of Silver.

While Vanguard's quantitative team runs a small portion of the portfolio, most money in Vanguard Energy is managed by Greg LeBlanc at Wellington Management. His half a dozen veteran analysts keep tabs on 150 energy companies and pick stocks with outstanding management, quality balance sheets, and promising project pipelines.

Between the two sleeves, skilled stock-picking has helped Vanguard Energy beat its benchmark and peers. Measured by its annual total returns, the fund has been a top quartile performer for short- and long-term periods. 

Investors should be aware that the fund can drop dramatically along with energy prices, as it did during the 2014 oil crash. But relative to peers, the fund preserves capital energy well during downturns and outperforms during recoveries. 

The fund also beats most competitors in terms of cost, with cheaper fees than more than 90% of no-load specialty funds. With a good price, great resources, and an approach to match, Vanguard Energy earns a Silver rating.