The Vanguard Group is a privately held investment management company that has over $3 trillion in assets under management (AUM). Vanguard was founded in Malvern, Pennsylvania, in 1975 by John C. Bogle. Vanguard has become one of the world's largest mutual fund and exchange-traded fund (ETF) providers. It offers a multitude of mutual funds, such as bond, balanced, stock, international and sector funds. Investors who are looking to gain exposure to a specific sector should consider Vanguard's sector funds, which include funds that provide specialized exposure to the health care, energy, precious metals and mining, and real estate investment trust (REIT) market.

Investors who seek professionally managed exposure to the energy sector should consider the Vanguard Energy Inv ("VGENX") fund, which offers cost-effective exposure to the energy equity market. The fund charges an annual expense ratio of 0.37%, which is 75% less than the average expense ratio of similar energy mutual funds.

Vanguard Energy Fund Investor Shares Investment Strategy

The Vanguard Energy Inv fund is an actively managed fund that seeks to provide exposure and long-term capital appreciation. The fund achieves its investment objective by investing at least 80% of its total net assets in securities of companies primarily engaged in energy-related business activities, which include production, exploration, research, conservation and transportation of energy or energy fuels. However, the fund may invest up to all of its total net assets in foreign securities within the energy sector.

Investment Management Team

The fund has two investment advisors, the Vanguard Equity Investment Group and the Wellington Management Company. The Vanguard Equity Investment Group selects the portfolio of energy stocks based on relative return potential through the use of its proprietary quantitative selection methodology. The Vanguard Equity Investment Group includes three portfolio managers, James D. Troyer, James P. Stetler and Michael R. Roach, who manage this fund. Troyer holds the Chartered Financial Analyst (CFA) designation and has been working in investment management since 1979. Stetler has been working in investment management since 1996 and has been advising the fund since 2012. Roach has been working in the investment management space since 2001 and has advised the fund since 2012.

The Wellington Management Company employs a bottom-up fundamental approach to selecting stocks. The stocks selected for the Vanguard Energy Fund are based on their potential for capital appreciation and sustainable earnings. Wellington Management includes two investment managers: Karl E. Bandtel and Gregory LeBlanc. Karl Bandtel is a senior managing director and has advised the fund since 1992. Gregory LeBlanc holds the CFA designation and has been working in investment management for over 20 years.

Portfolio Snapshot

As of June 30, 2016, the fund holds 147 stocks, and the share class has $10.1 billion in total net assets. The fund's top industry allocations are 40% to integrated oil and gas; 34.6% to oil and gas exploration and production; 7.9% to oil and gas equipment and services; 6.9% to oil and gas refining and marketing; and 4.5% to oil and gas storage and transportation. 

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