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Best Vanguard Funds for Your Retirement Savings


Vanguard Group manages $3 trillion of assets, so it should come as little surprise that the Malvern, Pa., behemoth is a big player in 401(k) plans. In fact, 32 of the firm’s portfolios rank among the nation’s 101 most popular funds in 401(k) plans. No other fund company comes close.

A little over one-third of the big Vanguard retirement-plan products are index funds, a concept with which the firm is synonymous. Also prominent on the list are Vanguard’s target-date funds, a solid choice for investors who want a one-stop, no-fuss option. According to Vanguard, 88% of all the 401(k) plans it administers offer its Target Retirement funds as an investment option, and 66% of plan participants invest in one.

But Vanguard has many actively managed funds, and eight of them also appear on the list. Like all Vanguard funds, these eight carry extraordinarily low expense ratios, particularly for actively managed funds. Low fees aside, we wondered how good these funds really are, so we analyzed them, ranking each one “buy,” “sell” or “hold.” And for those funds that we rated hold or sell, we offer alternative suggestions.

The funds are listed in order of 401(k) assets, starting with the biggest, based on data from Brightscope, a consulting firm that rates and ranks retirement plans. But the figures listed are for each fund’s total assets. Symbols and expense ratios are for each fund’s Investor share class, the most expensive class Vanguard offers. Cheaper share classes may be in your 401(k) plan. Returns are annualized and as of June 30, 2015.

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