How I Found a Top-Performing Vanguard Fund by Accident

One of Vanguard’s best-performing mutual funds is in my portfolio. It’s been there for years, long before it outranked 99% of its global large-stock value Morningstar Category peers over most trailing periods through February.

How was I so prescient? What was my ingenious process?

Here’s my secret: There is no secret. It was an accident. Dumb luck.

My investment in Vanguard Global Capital Cycles VGPMX began as an ill-considered bet that languished before reviving long after I had tried to forget about it.

But it worked. Hallelujah! The fund has been my worst and best mistake, the stray dog of my portfolio that became a prize-winning pooch.

I’ve earned no bragging rights, though. I disregarded the fund-selection methods I’ve long counseled others to follow and kept making obvious behavioral errors. In this case, I acted like a chain-smoking doctor. The fact that this investment gradually worked out does not validate my process, or lack thereof. Counting on lucky twists of fate is not a repeatable investment strategy.

To encourage you to do as I say, not as I have done, here’s an account of the mistakes I made with this fund, and how—eventually—it worked out (for now). Finally, I’ll share a few things I did right.

Siren Songs

I didn’t buy Vanguard Global Capital Cycles because I believed in its manager, process, or risk/reward profile, as any prudent investor should, especially one with my day job. I didn’t really buy that fund, though. The one I purchased on a whim in January 2013 was called Vanguard Precious Metals & Mining. It was run by a well-respected subadvisor, London’s M&G Investments, and was cheaper and more diversified than its average equity precious-metals Morningstar Category rival, but it was still a niche offering. It owned some fertilizer and chemical companies like Potash Corporation of Saskatchewan, a predecessor of Nutrien NTR, but most of its holdings were non-US-based miners, like Peruvian gold and silver explorer Hochschild HOC. It was a sector fund, and as any regular consumer—or producer—of Morningstar research knows, investors are better off not going on speculative escapades with sector funds. So, of course, I went on a speculative escapade.

At 2013’s start, precious-metals funds had suffered two years of deep losses. My rigorous due diligence consisted of asking, “How long can that go on?”

I decided “not long,” but I was wrong. It went on. And on.

In January 2018, on the fifth anniversary of my purchase, I was down more than 30% cumulatively, while the S&P 500 had more than doubled. The average precious-metals fund plunged more than 38%, which was as consoling as my spouse calling to say, “Everything’s fine, we’re at the emergency room.”

An Intervention

Clearly, I needed to change my tactics. I chose to bury it as if it were a bruising childhood memory, like when no one would join my junior high gym class dodgeball team.

This, however, turned out better than dodgeball.

I did not get pummeled. In fact, in 2018, the fund began a turnaround.

That was when Vanguard turned Precious Metals and Mining into Global Capital Cycles, a still-specialized but more-diversified portfolio that mixed in commodities, utilities, infrastructure, basic materials, and even financial and technology stocks with its miners. Its holdings are more eclectic. Big miners like Barrick ABX and Anglo American AAL are there, but it also has owned South Korean semiconductor maker Samsung Electronics, British drugmaker GSK PLC GSK, and Brazil’s Bank Bradesco BBD.

The news release and filings announcing the rechristening said the fund’s then-new manager, Keith White of Wellington Management, would seek “to capture opportunities in commodity-oriented industries, such as the materials and natural resource sectors, which follow cyclical patterns.” At the time, that sounded like Charlie Brown’s teacher to me, but I heard Wellington loud and clear. The Boston-based firm runs some of Vanguard’s biggest and most storied funds, some of which I have covered and recommended. Perhaps things would start looking up.

They did. Since its September 2018 transformation, the fund’s 246% cumulative gain through February 2026 more than doubled its average global large-stock value peer’s and MSCI ACWI Value Index’s returns, the benchmark for its current category. March 2026, so far, has not been kind to the fund—it had lost about 10% through March 19 as the war in Iran roiled markets—but the gap between it and its index still yawns.

Much of its improvement has been recent. Its 65.9% 2025 gain even matched one of the vaunted Magnificent Seven stocks, Alphabet GOOGL, which jumped 65.8% that year.

The fund seems built for these turbulent times. It has more than a third of its assets in basic materials, and much of that in metals and mining. These so-called HALO stocks, or companies with heavy assets and low obsolescence, have rallied as concerns have mounted about war, inflation, and a scarcity of raw materials for electric vehicles and artificial intelligence infrastructure. A large non-US stock stake has also helped.

That is the scenario—except for the war part—White has written about in the strategy’s annual reports since taking over. The themes motivating his stock picks have been that higher inflation will endure, and the global economy needs decades of investment to rejigger its infrastructure, factories, and supply chains for a more electric and less globally integrated future.

Good for him and his shareholders, including me, but I didn’t see that coming.

Lessons Learned

However, now I do see the errors of my ways.

I fell into classic behavioral pits: I was overconfident, thinking I was a bold contrarian when I was just guessing; I was loss-averse, fearing I might miss a face-saving rally if I sold; I anchored on my original investment sum and refused to sell until I regained it; I allowed my thesis to creep—instead of dumping the fund when it became something completely different from what I bought, I hung on.

Some Investing 101 basics could have helped me. I could have written and adhered to an investment policy statement that set clear guidelines for when and how to use sector funds. I could have logged my reasons for buying the original fund and systematically reviewed it when facts changed. I could have been humbler, admitting I was prone to the same faults that keep most investors from using sector funds well.

I’ll get on with those things right away. I promise. But here are some things I did right:

• I kept my mad money mad. I made this investment in a corner of my portfolio where I permit speculative forays. Call it my “mad money playpen” where I can blow off impulsive investing steam without imperiling my retirement. This position was never more than a fraction of my overall holdings—enough for a down payment on a decent, lightly used car but not enough to ruin me if I immolated the money.
• I went cheap and contrarian. Father forgive me, for I bought a sector fund, but at least it was cheap and diversified, and no one could accuse me of chasing returns. Though “what-goes-down-must-go-up” is not much of an investment strategy, reversion to the mean remains a powerful force in financial markets.
• I trusted the Parent. Vanguard is not perfect, but it does many things right. It’s one of the few fund families that earns Morningstar’s High Parent Pillar rating. If I had laid my initial wager on a fund from a firm that didn’t prioritize low costs and long-term-focused strategies and that didn’t have as good a track record selecting solid subadvisors for its actively managed funds, my experience could have been much worse.
• I made inertia my buddy. I did not compound the mistake of one rash decision with another by trying to make up for my losses with another speculative wager. I may not have been very decisive when results turned south, but neither was I hasty nor impulsive. Except for that first decision to buy the fund.

What’s Next?

Will a multidecade capital investment cycle and higher and more volatile inflation continue to propel this fund? Is it time to take profits and move on after its recent run before fickle commodity prices reverse its fortunes?

I don’t know. I’m not counting on another 66% annual gain, but there are dumber things an investor can do than hold a cheap, contrarian, globally diversified portfolio for the long term. This fund is still not a core holding, and its March slide could continue, but I’ll probably keep it. Maybe inertia will continue to be my friend.