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Founded by John C. Bogle in 1975, Vanguard is one of the world's largest investment management companies. With around $6.2 trillion of assets under management, the company offers nearly 190 domestic funds and 220 funds for foreign markets (as of Jan 31, 2020). It offers asset management and financial planning services to clients throughout the globe.

Vanguard stands apart from other mutual fund companies because it is owned by the funds themselves. The company believes that this structure helps management focus better on shareholder interests. Among the advantages, Vanguard claims to offer is low-cost, no-load funds.

The initial investment of the majority of mutual funds from the family ranges from $0 to $3,000. As of Feb 28, 2021, none of the Vanguard mutual funds carried any load.

Vanguard invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments were made in the technology sector. Among the cyclical sectors, the fund family has invested the maximum in the financial services sector, while among the defensive sectors it has invested heavily in healthcare.

Technology Select Sector SPDR (XLK) has climbed 18.4% in the last six months and 86.2% over the past year. The sector turned out the best-performer among the 11 S&P 500 sectors.

3 Best Funds to Buy Now

Given such bullish circumstances, we have highlighted three Vanguard mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to gain from such factors. Moreover, these funds have encouraging three and one-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds.

Vanguard Explorer Value Fund Investor Shares (VEVFX - Free Report) seeks appreciation of capital in the long-term. The fund invests primarily in stocks of small and mid-size domestic companies, picking stocks considered by the fund’s advisor to be undervalued. Also, such stocks may have above-average dividend yields.

This Small Cap Blend product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and one-year benchmarks are 4.8% and 10.7%, respectively.

VEVFX has an annual expense ratio of 0.64%, which is below the category average of 1.10%.

Vanguard Short-Term Investment-Grade Fund Investor Shares VFSTX seeks income while maintaining limited price volatility. VFSTX invests in a variety of high-quality and, to a lesser extent, medium-quality fixed-income securities. The fund also invests to a limited extent in non-investment-grade and fixed income securities, mainly short-term and intermediate-term corporate bonds.

This Inv Grade Bond-Short product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and one-year benchmarks are 4.1% and 3.3%, respectively.

VFSTX has an annual expense ratio of 0.20%, which is below the category average of 0.72%.

Vanguard High-Yield Corporate Fund Investor Shares VWEHX aims to offer high level of current income. The fund invests the majority of its assets in a diversified group of high-yielding, higher-risk corporate bonds, which have medium- and lower-range credit ratings. In fact, the fund mostly invests in corporate bonds that are rated below Baa by Moody's or have an equivalent rating by any other independent bond-rating agency. If the bonds are unrated, the fund’s advisor determines its quality before investing.

This High Yield-Bonds product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the three and one-year benchmarks are 5.8% and 5.3%, respectively.

VWEHX has an annual expense ratio of 0.23%, which is below the category average of 1.00%.