Whether you are looking for an equities fund, an income fund, a high yield bond fund or have an eye on retirement down the road, Vanguard has a variety of low expense ratio funds that have stood the test of time.
So what are the best Vanguard funds?
Total Stock Market Fund
Best Vanguard Funds
What is the simplest way to get started investing in the stock market?
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The Vanguard Total Stock Market ETF [VTI] is about as good as it gets for any investor, especially beginners.
When you factor in fees, few money managers will beat the Vanguard Total Stock Market fund over time – it’s that good!
A combination of exceptionally low fees, low turnover and strong holdings makes it one of the best long term performers among the universe of ETFs.
| Minimum Investment | Expense Ratio | Risk |
| $0 | 0.04% | Above Average |
The portfolio composition is diversified across a range of equities sectors, including:
- Basic Materials
- Consumer Goods
- Consumer Services
- Financials
- Healthcare
- Industrials
- Oil & Gas
- Technology
- Telecommunications
- Utilities
Financials and technology generally have a heavy weighting in the portfolio with stocks such as Facebook, Apple, Microsoft, Alphabet, and Amazon leading the technology group and J.P. Morgan and Wells Fargo featuring in the top 10 holdings list.
The Vanguard Total Stock Market ETF gives you exposure to the best companies in the U.S. and has a strong track record of performance which is a primary reason it has accumulated over $500 billion in assets since inception.
>> Check Out Our Vanguard Review
Total Bond Market
Best Vanguard Funds
The Vanguard Total Bond Market ETF [BND] has an exceedingly low expense ratio compared to its peers; it’s just 0.05%.
As an ETF, it is easy to buy and sell intraday – unlike mutual funds, which can only be transacted at the close of business – and it is a good way to diversify risks of holding equities in a portfolio.
The Vanguard Total Bond Market ETF provides exposure to:
- U.S. investment grade bonds
- Investment grade bonds of credit quality Baa and above
| Minimum Investment | Expense Ratio | Risk |
| $0 | 0.05% | Average |
Since inception in 2007, the fund has generated annual returns just north of 4%.
This bond fund has an average duration of just over 6 years, targets a yield of 3%, and is designed to produce reliable income streams over the medium to long term.
>> Related: What Are Bonds?
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Real Estate Investment
Trust Admiral Shares
Best Vanguard Funds
The Vanguard REIT Index Fund [VGSLX] is passively managed and tracks the performance of the MSCI US REIT Index.
The goal of the fund is to provide a high level of income and moderate long-term capital appreciation.
| Minimum Investment | Expense Ratio | Risk |
| $0 | 0.12% | Above Average |
Since inception the Vanguard REIT Index has generated annualized returns just above 10% and has a dividend just shy of 4%.
The fund has exposure to a broad range of REIT subsectors, including:
- Retail REITs
- Specialized REITs
- Residential REITs
- Office REITs
- Healthcare REITs
- Diversified REITs
- Industrial REITs
- Hotel and Resort REITs
The Vanguard REIT Index holdings includes a who’s who of REIT companies, including Simon Property Group, Equinix, Public Storage, Boston Properties, and Digital Realty Trust among others.
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Target Retirement 2050
Best Vanguard Funds
The Vanguard Target Retirement 2050 Fund Investor Shares [VFIFX] is a life-cycle fund meaning that as you approach retirement the allocation to equities diminishes and the allocation to bonds increases.
The fund invests in four Vanguard index funds, and has a 90%/10% weighting of equities to bonds at this time.
If you expect to retire around 2050, this fund allows you take a hands-off investing approach whereby your allocation to more conservative bonds will adjust automatically.
| Minimum Investment | Expense Ratio | Risk |
| $1,000 | 0.16% | Average |
The SEC yield on the fund is just above 2% at this time.
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Growth Index Fund Admiral Shares
Best Vanguard Funds
The Vanguard Growth Index Fund [VIGAX] invests in the stocks of large U.S. companies.
Like so many other Vanguard funds, the expense ratio of 0.06% is very much lower than the amount charged by industry peers.
The focus of the fund is on large capitalization stocks, so underperformance relative to the general market is always a risk.
| Minimum Investment | Expense Ratio | Risk |
| $10,000 | 0.06% | Above Average |
The fund has equity sector diversification to technology, healthcare, and consumer service predominantly, but also financials, consumer goods, oil & gas, basic materials and telecommunications.
Among the top holdings in the fund are the best known names in U.S. industry, such as:
- Apple
- Alphabet
- Amazon
- Comcast
- Home Depot
- Philip Morris International
- Visa
- Coca Cola
- Walt Disney
>> Related: What Are The Best Stocks To Buy?
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500 Index Fund Admiral Shares
Best Vanguard Funds
The Vanguard 500 Index Fund [VFIAX] is the first index fund for individual investors and was designed as an inexpensive way – the expense ratio is 96% lower than its peers at just 0.04% – to get diversified U.S. equity exposure.
With full exposure to the stock market, the primary risk of the fund comes from general market volatility.
| Minimum Investment | Expense Ratio | Risk |
| $10,000 | 0.04% | Above Average |
Like other Vanguard funds, broad sector exposure is achieved with allocation to:
- Information Technology
- Energy
- Financials
- Healthcare
- Industrials
- Consumer Discretionary
- Consumer Staples
- Utilities
- Telecommunications
- Real Estate
Some of the largest positions in the fund are Berkshire Hathaway, Facebook, Amazon, Alphabet, Apple, Johnson & Johnson, Microsoft, Wells Fargo and J.P. Morgan Chase & Co.
>> Related: Is Twitter Stock A Buy Or A Sell?
Equities Fund
Best Vanguard Funds
The Vanguard Windsor Fund [VWNDX] is a Large Value equities fund that scoops up value stocks with the potential to outperform the market, especially after recessionary periods.
The composition of stock holdings is primarily in U.S. based equities but up to 30% of the funds assets can be invested internationally.
Managers strive to find “value stocks that have strongly outperformed coming out of past bear markets, often for extended periods” by identifying companies that are out of favor and trading at price well below book value.
| Minimum Investment | Expense Ratio | Risk |
| $3,000 | 0.30% | High |
Financial, healthcare, industrial, energy and information technology are among the largest sector holdings in this fund of approximately 140 equities holdings.
Since inception back in October 1958, the Windsor Fund has racked up an astonishing annualized return just north of 11% annually.
Best Vanguard Funds Summary
Depending on your age and time horizon to retirement, a heavier weighting towards bonds or equities will be more appropriate. Regardless of which fund you select from Vanguard, you can take comfort in knowing you are investing with a reputable company that has earned its stripes by honoring its commitment to charge low fees to customers while delivering over the long term on performance.
| VANGUARD INVESTMENTS | |
InvestorMint Rating 4 out of 5 stars |
via Vanguard secure site |
Have you invested in Vanguard funds? Did we miss any that you think should be included on the list? Share your comments below, we would love to hear from you.
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