At the turn of the quarter, its time again to review my fund positions but this time with a new perspective, courtesy of Vanguard! Vanguard offers on their website a fund list* of cumulative returns that anyone can find here. Below are the top Vanguard Funds ranked in order by 3 year returns.
Vanguard Fund 3 Year Rankings as of 3/31/2021
Results
How interesting that one fund, the U. S. Growth Fund, comes in number ONE for the 3, 5 and 10 year periods. It may or may not be Vanguard's best equity fund but someone has to be number one! Note that the TOP RANK DID NOT PERSIST for the 1 year, 3 month nor 1 month period. In fact, This was the WORST fund, ranked 37 out of 37, for the 3 month period and the second worst fund for the month of March! 14 Funds had HIGHER average ranks than U. S. Growth.
The fund with the HIGHEST average ranking, at 11.3, was Diversified Equity. This too was in the lower half of funds for the 2021 rankings. The top funds for the first quarter look very different:
All 3 mo. 2021 winners were highly ranked for the 1 year period (it may be the reason for the 1 yr. ranking) but all ranked in the lower half for prior periods. The best average ranking for all periods was the Extended Market Index, which likewise, ranked at the bottom for 1 month!
Conclusion
Its like you can't win trying to pick or guess which fund to buy. Let's look at my benchmark, as usual, the flagship Vanguard 500 Index Fund:
With a 14.2 batting average (in the top third or so) and a no worse than 26 ranking, it has more persistence than most and may be as good as any.
*Why Vanguard? Scale, fees and a business model aligned with the investor.
This post reports Vanguard's universe of 53 equity funds' cumulative returns for 1 mo., 3mo., 1 yr., 3 yr., 5yr and 10 year periods. Only 37 funds have 10 year periods, so I limited ranking to those funds. Caveat's include the following: no actual returns are shown and the distribution of returns can make rankings misleading, especially if they are bunched, then, the rankings within the bunch have very little meaning. Also, Vanguard includes select funds in their list, there are many others in and out of Vanguard. Fund composition and styles can change while their names may not. This makes period to period comparisons difficult or invalid. Finally, most funds have overlapping positions, especially to the 500 Index fund, and their returns may not be distinct.
Source: Vanguard.com
Disclaimer: Posts are for education only, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors. Please follow this blog by email.
© 2021 George Rahal.
*Why use Vanguard as a baseline for fund returns? Well they are, in my opinion one of the only managers with a business model made for investors. Their mission is aligned with investors not fund owners or fund managers, their size lets them hire the best people, their fees are the lowest in the space (don't be fooled by phony zero commision newcomers).
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