Vanguard Windsor II Fund (VWNFX) Investor Shares

Vanguard Windsor II is an actively managed popular mutual fund offered by Vanguard. This fund invests mainly in US companies’ stocks especially in undervalued large capitalization companies. More fund review is described below.

Vanguard Windsor II Fund Investor Shares (VWNFX)

The objective of Vanguard Windsor II Fund is to provide long-term capital appreciation and income. This Large Value US Stock fund invests in mid- and large-capitalization companies whose stocks are considered by an advisor to be undervalued. Undervalued stocks mean these stocks are out of favor with investors and the advisor feels are trading at prices that are below average in relation to such measures as book value and earnings. These stocks often have above-average dividend yields.

Fund Details

• Fund Inception Date: 06/24/1985
• Ticker Symbol: VWNFX
• CUSIP: 922018205
• Beta (3yr): 1.04
• Rank in category (YTD): 22%
• Category: Large Value
• Yield: 2.04%
• Capital Gains: 0%
• Expense Ratio: 0.35%
• Sales Load: 0%
• Net Assets: $ 33.48 billion
• Number of Years Up: 18 years
• Number of Years Down: 7 years
• Annual Turnover Rate: 23%

Updated on 1/5/2012

Since its inception in 1985, this stock fund has been managed by James P. Barrow. This top stock fund has total net assets of $33.48 billion. The annual expense ratio of this fund is 0.35%. This figure is lower compared to the average in the Large Value category which is 1.23%. The fund dividend yield is 2.04%.

This top equity fund has received 4-stars rating from Morningstar. The benchmark of this Vanguard fund is Russell 1000 Value Index. It has performed in 18 years of positive return with its best achievement in year 1997 (32.37%). This best large value US stock fund has YTD return of 1.12%. Based on the load adjusted return, the fund’s performance is as below:

• 1-year: 8.46%
• 3-year: 13.36%
• 5-year: -1.13%
• 10-year: 4.33%

Vanguard Windsor II Fund

The minimum initial investment needed to open either brokerage or IRA account is $3,000. This best large value stock fund is part of no load fund. This means there is no 12b1 fee and no sales load fee. The minimum subsequent investment is $100.

There are 87 brokerages that provide this large value fund. They are E Trade Financial, Schwab Retail, T Rowe Price, JP Morgan, Ameriprise Brokerage, Fidelity Retail Funds Network, Royal Alliance, TD Ameritrade Inc, ING Financial Advisers – SAS Funds, etc. More details about the fund risks can be found in the fund’s prospectus.

The 10 largest holdings as of November 30, 2011 are Conoco Phillips, Pfizer Inc, International Business Machines Corp, Philip Morris International Inc, Microsoft Corp, Occidental Petroleum Corp, Wells Fargo & Co, Johnson & Johnson, American Express Co and JP Morgan Chase & Co.

These top 10 holdings represent 27.0% of the total net assets. The top equity sector diversifications are Financials (17.60%), Health Care (14.20%), Energy (13.70%), Industrials (12.70%), Consumer Staples (12.20%) and Information Technology (12.00%).

Goods:

• Popular U.S. domestic stock mutual fund
• Low cost

Bads:

• actively managed fund

Disclosure: No Position

Other Actively Managed Vanguard Funds:

• Vanguard Wellesley Income Fund (VWINX)
• Vanguard PRIMECAP (VPMCX)
• Vanguard Wellington Investor (VWELX)