The $4 billion Vanguard Selected Value Fund (VASVX) gets top ratings from both Morningstar and S&P Capital IQ. The latter cited it as its top pick in the domestic equity mid-cap category of funds this year.
The fund has a 10-year average annual return of 7.7% putting it in the top 19% of all the funds in its category. For the three-year period through Nov. 25, the fund had an average annualized total return of 19.4% versus 17.8% for its mid-cap value funds peers.Morningstar analyst Dan Culloton writes that the fund's two managers, Jim Barrow and Mark Giambrone, are "traditional value investors who look for dividend-paying companies with strong balance sheets and business models, but whose shares offer above-average yields and below-average valuations. They stay fully invested in a compact portfolio of fewer than 50 stocks and trade infrequently." Its top holdings are cruise-ship line Royal Caribbean Cruises (RCL), Constellation Energy (CEG), a power generation and regulated electric and gas public utility in central Maryland, and Yamana Gold (YRI), which operates six gold mines in Central and South America.
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