In 2017, Vanguard Group emerged as the fastest-growing asset management firm for the sixth straight year. Its ability to create effective investment goals with suitable asset allocation and low-cost portfolio contributed to this series of gains. Additionally, strong recovery in markets in 2017 following the passage of the Tax Cuts and Jobs Act of 2017 also benefited Vanguard, which manages a large number of index funds.
Major oil producing nations’ decided to extend the crude production cut accord, thereby giving a boost to the equity-based fund market. In this context, strong performance by most of the mutual funds of this fund family calls for investment in the major Vanguard mutual funds this year.
What Contributed to Vanguard’s Strong Fund Performance?
Vanguard generated net inflows of $368 billion in 2017, which was 13.9% more than 2016’s figure. Also, the market leader in low-cost investing and target date funds managed more than $5 trillion of assets last year. In fact, the asset manager managed to bring in more than $1 billion per day in new investable assets, becoming the best growing fund family for six consecutive years.
CEO of Vanguard, Mortimer J. “Tim” Buckley has said the main focus of the company in recent times is to focus more on Personal Advisor Services. The services will be provided to investors, who have investable assets of $50,000 or higher, at a minimal fee of 0.3%.
Further, Buckley added that the company is focused on expanding its business outside the U.S. by maintaining financial advice costs similar to that of target date funds. The fund family started exploring the U.K. market last December by offering two target-date retirement funds specifically to young investors.
Sectors Contributing to Vanguard’s Gains
Vanguard invests in a variety of sectors that are sensitive, cyclical and defensive. Among the sensitive sectors, technology is the largest holding. As for the cyclical sectors, the fund family invests the maximum in the financial sector. It also invests heavily in healthcare when considering defensive sectors.
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