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Vanguard - Who should invest in an asset class
Personal Investors

Who should invest

Taxable money markets

Who should invest?

  • Investors seeking a stable share price and interest income.
  • Investors seeking liquidity (the ability to readily convert assets into cash).
  • Investors seeking a "parking place" for cash while awaiting opportunities for longer-term investments.

Tax-exempt money markets

Who should invest?

  • Investors seeking a stable share price and interest income that is exempt from federal and/or state income tax.
  • Investors in higher tax brackets.
  • Investors seeking stability of principal and liquidity (the ability to readily convert assets into cash).

Taxable short-term bond funds

Who should invest?

  • Investors seeking a high level of interest income.
  • Investors willing to accept modest fluctuations in share price.
  • Investors seeking a bond investment to balance the risks of a portfolio containing stocks.

Taxable intermediate-term bond funds

Who should invest?

  • Investors seeking a high and relatively stable level of income.
  • Investors willing to accept moderate fluctuations in share price.
  • Investors seeking a bond investment to balance the risks of a portfolio containing stocks.

Taxable long-term bond funds

Who should invest?

  • Investors seeking a high and stable level of interest income.
  • Investors willing to accept significant fluctuations in share price.
  • Investors seeking a bond investment to balance the risks of a portfolio containing stocks.

Inflation-indexed securities

Who should invest?

  • Investors seeking a bond fund that provides inflation protection.
  • Investors willing to accept some volatility in income distributions and modest fluctuations in share price.
  • Investors seeking additional portfolio diversification that inflation-indexed securities can offer.

Tax-exempt short-term bond funds

Who should invest?

  • Investors seeking interest income that is exempt from federal and/or state income tax.
  • Investors in higher tax brackets.
  • Investors willing to accept modest fluctuations in share price.

Tax-exempt intermediate-term bond funds

Who should invest?

  • Investors seeking interest income that is exempt from federal and/or state income tax.
  • Investors in higher tax brackets.
  • Investors willing to accept moderate fluctuations in share price.

Tax-exempt long-term bond funds

Who should invest?

  • Investors seeking interest income that is exempt from federal and/or state income tax.
  • Income-seeking investors in a high tax bracket.
  • Investors willing to accept significant fluctuations in share price.

Balanced funds

Who should invest?

  • Investors seeking a combination of long-term growth of capital and income from dividends and interest.
  • Investors with a long-term investment horizon (at least 5 years).
  • Investors seeking a simple way to achieve a broadly diversified holding of stocks and fixed-income investments.

Life-cycle funds

Who should invest?

  • Investors seeking a transparent, simple-to-use solution for identifying and maintaining a proper asset allocation.
  • Investors seeking a diversified, static-allocation portfolio that matches their current time horizon, risk profile, and investment goals should consider a Vanguard LifeStrategy® life-cycle fund.
  • Investors seeking an all-in-one retirement portfolio that automatically grows more conservative as their expected retirement date nears should consider a Vanguard Target Retirement life-cycle fund.

Payout funds

Who should invest?

  • Investors seeking a monthly payment to supplement their retirement income.
  • Investors with a long-term investment horizon (at least five years).
  • Investors who are able to tolerate the inherent risks of Managed Payout Funds.
  • Investors in tax-deferred accounts, such as IRAs.

Domestic stock funds–general

Who should invest?

  • Investors seeking possible dividend income and possible long-term growth of income and capital.
  • Investors with a long-term investment horizon (at least 5 years).
  • Investors willing to accept significant fluctuations in share price.

Domestic stock funds–more aggressive

Who should invest?

  • Investors seeking maximum long-term total return, without significant dividend income.
  • Investors with a long-term investment horizon (more than 5 years).
  • Investors willing to accept wide fluctuations in share price.

Domestic stock funds–sector specific

Who should invest?

  • Investors seeking to complement a well-diversified stock portfolio with a mutual fund that invests in a specific market sector.
  • Investors seeking long-term growth of capital, without significant dividend income.
  • Investors with a long-term investment horizon (5 to 10 years or longer).
  • Investors willing to accept significant fluctuations in share price.

International/global stock funds

Who should invest?

  • Investors seeking to further diversify a portfolio of U.S. securities.
  • Investors seeking long-term growth of capital, without significant dividend income.
  • Investors with a long-term investment horizon (at least 5 years).
  • Investors willing to accept significant fluctuations in share price.
  • Investors willing to accept the additional risks associated with international investing.

International taxable bond funds

Who should invest?

  • Investors seeking exposure to the largest global asset class.
  • Investors willing to accept significant fluctuations in share price.
  • Investors seeking to mitigate volatility in a diversified portfolio.
  • Investors willing to accept the additional risks associated with international investing.

All investing is subject to risk, including the possible loss of principal. Investments in bonds are subject to interest rate, credit, and inflation risk.

Target Retirement Funds are subject to the risks associated with their underlying funds.

A money market mutual fund investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market mutual fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.

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