3 Vanguard Funds to Avoid for Your Retirement Savings

Vanguard is the biggest fund company in the land, with more than $3 trillion in assets.

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Vanguard is the biggest fund company in the land, with more than $3 trillion in assets. So chances are high that many retirement savers have access to Vanguard funds in their 401(k) plans. But size is no guarantee of good results.

Thirty-four Vanguard funds appear on a list of the 105 most popular mutual funds in employer-sponsored retirement savings plans. No other fund company comes close. Many of those Vanguard funds including index funds, actively managed funds and target-date funds are well suited for retirement savers. (Read more about the best Vanguard funds for your retirement savings.)

But some of the popular funds didn't make the cut based on our analysis of the funds' performance and prospects. Here are three Vanguard funds to avoid in your 401(k). You are better off investing your retirement savings in other better-performing funds.


The list of funds, based on 401(k) assets under management, was generated for Kiplinger by BrightScope, a financial-information company that rates retirement-savings plans. The funds are listed in alphabetical order. We used data for the Investor share class for each fund, but your retirement plan may offer a different share class that presumably charges a lower fee. Note that any funds nominally closed to new investors may be open to participants in a 401(k) plan. Returns are as of October 11.

Nellie S. Huang
Senior Associate Editor, Kiplinger's Personal Finance

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.