Which VANGUARD MUTUAL FUND is better?

I read on this financial magazine this Friday night this top List of mutual funds to invest on...i am trying to get more information and opinions on this two:

1. VANGUARD PRIMECAP CORE FUND

2. VANGUARD SELECTED VALUE FUND

Has anyone invested in any of these two? Which one would you advise to invest money on for more than 5 years ?

Well, any thoughts or ideas would be much appreciated !

Hello,

I can not personally advise you, but I can certainly provide you with some information and opinion.

Both Primecap Core and Selected Value are very good funds. However, it is very difficult to compare these 2 funds, as they employ very different investment strategies. Morningstar categories Primecap Core as a large cap growth fund while it categorizes Selected Value as a mid cap value fund.

Over very long periods of time, smaller cap value strategies have outperformed large-cap growth strategies. There is an excellent report on the Tweedybrown.com website that compares size (small and large) and style (value and growth) characteristics to performance over time. You would go to the research and reports link and click on "What Has Worked in Investing"

With that said, I believe that large cap stocks will outperform smaller cap stocks for a while based on the current relative valuations of these asset classes.

I hope this helps.


Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net

This is not the type of question where you will find a definitive answer. It is more of an oppinion type question. The Primecap Core fund is large stable companies that will grow at about the rate of the economy in general although it does contain a dollep of foreign companies. That is a plus for the fund. The Selected Value Fund is made up of Mid Cap stocks that are of a value nature rather than a growth nature with also a small dollep of foreign companies.

In my mind it is somewhat a flip of the coin. I will say this though. If the economy goes into a recession you might be a little better off with the Primecap Core Fund.

Before I finish, I wish to plug my favorite Vanguard Fund. The Global Equity Fund. In my opinion, since this is an opinion matter, this is a better all around fund because it has global diversity and provides some safety from the collapsing U S dollar.