As some investors prefer to park their money directly with specific fund families in order to avoid some of the transaction fees of switching between mutual funds, we at TheStreet.com Ratings have been looking at the best-performing Vanguard mutual funds for the month of December.

Vanguard's fund with the highest one-month total return for December is the Vanguard Extended Duration Treasury Index Fund ( VEDIX), which returned 22.37%.

The fund holds U.S. government debt with maturities going out 20 to 30 years. Through most of November and December the yield of 30-year bonds was in freefall due to panic buying. The yield bottomed at 2.51% on Dec. 18 and didn't rebound, to just over 3%, until the new year. After a one-year run-up of 55.62%, the prices of government bonds have less upside potential than downside risk.

The second-best fund within this family, Vanguard REIT Index Fund ( VGSIX), gained 17.39% for the month. This fund holds U.S. real estate investment trusts like Simon Property Group ( SPG), up 11.85% in December; Vornado Realty Trust ( VNO), up 12.91%; Public Storage ( PSA), up 15.78%; and HCP ( HCP), up 34.35%.

Sure, the real estate market has been grim with mass quantities of foreclosures and lackluster home sales holding down property prices. The S&P/Case-Shiller Index of property prices in 20 major U.S. cities dropped another 18% in October. Pending previously owned home sales dropped 4% in the month of November to the lowest level on record and completed purchases declined 8.6%. The median home price is 13% below November 2007.

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