Looking for a Vanguard Gold Mutual Fund?

Vanguard does not offer a pure gold fund; However, it does have a fund that invests about one-quarter of its portfolio in precious metals and mining companies, providing indirect exposure to this market: The Vanguard Global Capital Cycles Fund (VGPMX).

VGPMX Characteristics

VGPMX seeks to take advantage of opportunities stemming from changing investor sentiment that result from cycles of under- and overinvestment in capital-intensive industries. It also invests at least 25% of the fund in precious metals and mining securities.

This mutual fund was established on May 23, 1984, with the sponsorship of Wellington Management, which later became a subsidiary of Vanguard. As of Feb. 20, 2025, the fund has generated an average annual return of 4.72% since its inception.

The fund’s original benchmark was the spliced index, which included data from the S&P/Citigroup World Equity Gold Index through June 30, 2005, the S&P Global Custom Metals and Mining Index through Sep. 25, 2018, and the S&P Global BMI Metals & Mining 25% Weighted Index thereafter. The benchmark return over the same period has been 4.31%.

The Vanguard Global Capital Cycles Fund charges a relatively low annual expense ratio of 0.44%, which is lower than the average expense ratio of mutual funds with similar holdings. It requires a minimum investment of $3,000.

Fund Strategy

According to the fund’s prospectus, Vanguard Global Capital Cycles is actively managed and invests in U.S. and foreign equity securities. Fund managers purchase securities in companies and industries experiencing a decline in capital spending but avoid easily replicated assets and companies.

Those that cannot be easily replicated may include assets or businesses with differentiated offerings, a low-cost advantage, or which have and maintain an advantage over industry competitors. Fund managers ensure investments vary across various sectors with a mix of developed and emerging markets and typically hold companies with varying market capitalizations.

The fund holds 25% or more of its net assets in securities whose principal business activities are in the precious metals and mining industry.

As of Feb. 20, 2025, the fund holds 58 stocks with total net assets of $1.4 billion. As of the fiscal year ending Jan. 31, 2025, it had a turnover rate of 67%. The fund holds global stocks, and its country exposures are concentrated in North America, Europe, and emerging markets.

VGPMX Risks and Suitability

Since the Vanguard Global Capital Cycles Fund provides specialized exposure and may invest a substantial portion of total net assets in foreign securities, it is exposed to currency risk, country or regional risk, non-diversification risk, industry concentration risk, stock market risk, and investment style risk.

As of Feb. 20, 2025, based on trailing 10-year data, the VGPMX has an average annual standard deviation (a proxy for risk) of 17.36% and a Sharpe ratio of 0.30. When measured against the MSCI ACWI NR USD Index—the global standard index, it has an alpha of 0.91 and a beta of 0.85.

The fund’s Sharpe ratio indicates it provided investors with a low average annual return on a risk-adjusted basis. Its alpha indicates it overperformed the global standard index by an average of almost 0.91% annually over this same period.

The fund is generally only suitable for highly risk-tolerant investors and long-term investors seeking an investment that primarily holds foreign securities in the precious metals and mining sector. For these investors, it should be held as a satellite holding in a diversified portfolio with a long-term investment horizon.

The Bottom Line

Vanguard is one of the top brokers in the world and offers many mutual funds and ETFs. However, the closest thing to a gold fund it offers is its Global Capital Cycles fund, which holds at least 25% of its holdings in precious metals and mining securities.