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ETF- ofAn exchange-traded fund– is a series of investments in different companies. ETFs are distributed and traded on an exchange just like common stocks.But instead of a common stock, investors can gain exposure to a variety of companies without having to worry about choosing the right one.
Vanguard offers ETFs and mutual funds that are popular with investors.In fact, the founder, Jack Bogle, created the first index fund, a security designed to track a specific market benchmark.Now, nearly 50 years later, Vanguard has maintained its reputation for consistently tracking the overall market.
This article takes a closer look at some of the best Vanguard ETFs. Together, these ETFs can help investors build a well-diversified portfolio for a passive index investing strategy that captures growth, generates income, and mitigates risk.
The 8 Best Vanguard ETFs for Building a Diversified Portfolio
|ETF||Ticking||TLDR (too long; unread)|
|Vanguard Total Stock Market ETF||VTI||It reflects the whole economy, follows 4,000 companies|
|Vanguard S&P 500 ETF||TO LEAVE||Includes the 500 largest companies in the S&P 500|
|Vanguard Growth-ETF||VUG||It tracks the top 250 large-cap stocks|
|Vanguard Short-Term Inflation-Protected Securities ETF||VIC||Tracks US Treasuries as a hedge against inflation|
|Vanguard Total Bond Market Index Fund ETF||BND||Including exposure to the US bond market|
|Vanguard real estate ETF||VNQ||An index that tracks real estate investments in the MSCI US Investable Market Real Estate 25/50 index|
|Vanguard Total International Stock ETF||VXUS||Tracks growth in emerging markets via the FTSE Global All Cap ex US index|
|Vanguard ESG US Stock ETF||ESGV||It verifies that companies meet specific environmental, social and governance criteria by tracking the FTSE US All Cap Choice Index|
1. Vanguard Total Stock Market ETF (VTI)
1 Year Performance:-17,92%
Performance from the start:347,32%
Vanguard Total Stock Market ETF pratiCRSP US total market index. This index is a good representation of the overall stock market because it contains a rangethe large-, mid- and small-cap shares. With more than 4,000 companies in the ETF's portfolio, it gives investors exposure to the earnings of high-performing companies. The largest holdings are Apple, Microsoft, Amazon, Tesla and Google's parent company Alphabet.
VTI is a popular alternative to the investment fund Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX).This mutual fund uses the same index of US companies, but requires an initial investment of $3,000. VTI has no minimum requirements and has a low expense ratio, making it easy for new investors to get started.
2. Vanguard S&P 500 ETF (TO LEAVE)
1 Year Performance:-15,39%
Performance from the start:315,61%
The Vanguard S&P 500 ETF (VOO) is a good addition to VTI. VO follows. This index includes the 500 largest publicly traded US companies. These tend to be high-growth stocks that are concentrated in the technology sector.
VOO is also a good barometer of the overall health of the economy.It allows investors to catch the highs when the economy is growing, and the lows when it is contracting. Like VTI, VOO gives investors exposure to many of the same high-performing companies without investing in any of them individually.
Read more >>> VOO vs. VTI: what is the wisest choice in 2022?
3. Vanguard Growth-ETF (VUG)
1 Year Performance:-25,78%
Performance from the start:422,41%
Vanguard Growth ETF (VUG) is a high-risk, high-reward index fund. Track the performance of major growth stocks with trackingCRSP US Large Cap Growth-index.More than 40% of its assets are invested in Apple, Microsoft, Amazon, Tesla and Alphabet.
Why is this a big problem?Read more about FAANG shares.
Compared to Vanguard's other composite ETFs, VUG has experienced higher cumulative growth. It is also said to be more unstable. Compared to the other ETFs on this list, VUG has seen a bigger decline over the past year and has provided investors with much lower returns. In addition, it offers a lower dividend yield than many other ETFs with comparable holdings. For more aggressive investors, VUG has the potential to earn a higher return on total investment, albeit at a lower ratepassive incomegeneration potential.
4. Vanguard Short-Term Inflation-Protected Securities ETF (VIC)
1 Year Performance:-2,97%
Performance from the start:13,08%
The Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) is a lesser-known ETF that offers inflation protection. The index tracks US government bonds backed by the federal government.Bonds included in the index have maturities of less than five years and are regularly adjusted for inflation.
Depends on the investorrisk tolerance, VTIP can be a good counterweight to high-risk ETFs like VUG. While the overall stock market was down double digits last year, VTIP was only down less than three percent. Like regular stock-based ETFs, VTIP has a low expense ratio and pays quarterly dividends. This makes it a good choice for consistently generating passive income.
5. Vanguard Total Bond Market Index Fund ETF (BND)
1 Year Performance:-14,57%
Performance from the start:52,61%
Vanguard Total Bond Market Index ETF (BND) is a less aggressive ETF option than VTI or VOO. BND tracks US government bonds. Bonds typically carry less risk than stocks because they are backed by complete faith and trust in the government. This ETF can be a useful counterweight to protect against stock market volatility.
Related >>>How to invest in bonds: diversify your portfolio
One of the attractive features of BND is that it has a larger and more frequent dividend payment schedule.Instead of receiving quarterly payouts, BND investors receive monthly payouts. While the cumulative return on BND is not as high as a stock index such as VTI, the opportunity for consistent cash flow is attractive to many investors seeking a passive income stream.
6. Vanguard real estate ETF (VNQ)
1 Year Performance:-18,66%
Performance from the start:255,31%
Dividend Yield:3.65% (unadjusted)
Vanguard Real Estate ETF (VNQ) is an indexreal estate investment trusts (REITs). To washMSCI US Investable Market Real Estate Index 25/50. VNQ encompasses a variety of REIT investments, ranging from healthcare institutions to commercial enterprises.
REITs are a great way for investors to gain real estate exposure without investing in real estate or becoming a landlord. A REIT ETF also spreads risk across different types of real estate. While the expense ratio is slightly higher than Vanguard's other ETFs, the high quarterly dividend yields make up for it.
7. Vanguard Total International Stock ETF (VXUS)
1 Year Performance:-25,18%
Performance from the start:28,97%
The Vanguard Total International Stock ETF (VXUS) is similar to VTI, except it tracks international companies, not just those in the US. VXUS followsFTSE Global All Cap ex US-indexgiving investors exposure to emerging market companies.
Some of the largest holdings in VXUS include Taiwan Semiconductor Manufacturing, Nestle, and Tencent Holdings Ltd., a giant multimedia conglomeratebased in China. International investments help investors diversify risk to focus exclusively on US markets.
8. Vanguard ESG US Stock ETF (ESGV)
1 Year Performance:-20,47%
Performance from the start:32,09%
Vanguard ESG US Stock ETF (ESGV) is a newer ETF founded in 2018. FollowFTSE US All Cap Choice-index.This fund specifically monitors companiesenvironmental, social and management criteria.The aim is to avoid investing in companies that violate human rights, fail to comply with certain environmental standards or are companies that contribute to issues such as the proliferation of weapons or fossil fuels.
ESG funds are growing in popularity,especially among younger investors. But one thing to keep in mind when considering investing in an ESG-screened fund is that many are more focused on environmental and sustainability efforts than social issues such as human rights. Investors looking for a well-rounded ESG-focused ETF will want to do their own due diligence and check under the hood that these funds align with their values before investing.
Read more >>>How to know if a company or fund is really ESG
Takeaway: Should You Invest in Vanguard ETFs?
Cumulatively, all Vanguard ETFs have posted positive returns since their inception, with varying degrees of success depending on each ETF's risk tolerance. And Vanguard is known for its industry-leading low rates.
ETFs are a great way to take advantage of economic growth without trying to bet on a few companies that outperform the market. And remember, Vanguard's ETFs (or any ETFs for that matter) can be combined to increase diversification by giving investors exposure to different types of companies, asset classes, and markets.
ETFs are NBD >>>
- What is an ETF?
- ETF Investment 101: Learn how to invest in ETFs
- Are ETFs Derivatives?
- What are ETNs and how are they different from ETFs?
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Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.Which Vanguard ETF pays the highest dividend? ›
- High Dividend Yield ETF (VYM)
- Dividend Appreciation ETF (VIG)
- International High Dividend Yield ETF (VYMI)
- Utilities ETF (VPU)
- Real Estate ETF (VNQ)
Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.What are the hottest ETFs? ›
|ETF||Ticker||Assets Under Management (AUM)|
|Vanguard S&P 500 ETF||(NYSEMKT:VOO)||$290.9 billion|
|Invesco QQQ Trust||(NASDAQ:QQQ)||$170.5 billion|
|Vanguard Growth ETF||(NYSEMKT:VUG)||$81.8 billion|
|iShares Core S&P Small-Cap ETF||(NYSEMKT:IJR)||$66.0 billion|
Vanguard's fastest growing mutual fund was also the Vanguard Energy Index Fund, which grew by 38.4 percent. As of November 2022, the Vanguard Total Stock Market Index Fund was the largest fund owned by Vanguard, with net assets under management worth approximately 1.2 trillion U.S. dollars.What is the best Vanguard ETF to buy now? ›
- Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)
- Vanguard S&P 500 ETF (VOO)
- Vanguard Real Estate ETF (VNQ)
- Vanguard Total Stock Market ETF (VTI)
- Vanguard Total International Stock ETF (VXUS)
- Vanguard Information Technology ETF (VGT)
- Vanguard Total Bond Market ETF (BND)
|Proshares S&P 500 Dividend Aristocrats ETF (NOBL)||U.S. large value||4|
|iShares Core Dividend Growth ETF (DGRO)||U.S. large value||4|
|SPDR S&P Dividend ETF (SDY)||U.S. mid value||5|
|WisdomTree US Quality Dividend Growth Fund (DGRW)||U.S. large blend||5|
VTI vs VOO: The Verdict
If you like the name-brand recognition of the S&P 500 and want to stick to large-caps, then VOO might be the better option. If you don't mind some mid and small-cap exposure, then VTI could be a good pick. Investors can potentially also use both as tax-loss harvesting pairs.
If you hold ETF shares for one year or less, then gain is short-term capital gain. If you hold ETF shares for more than one year, then gain is long-term capital gain.
You expose your portfolio to much higher risk with sector ETFs, so you should use them sparingly, but investing 5% to 10% of your total portfolio assets may be appropriate. If you want to be highly conservative, don't use these at all.
|XLK||Technology Select Sector SPDR Fund||20.23%|
|QCLN||First Trust NASDAQ Clean Edge Green Energy Index Fund||20.02%|
|VGT||Vanguard Information Technology ETF||19.34%|
|IYW||iShares U.S. Technology ETF||18.92%|
Dividend ETFs and other value-oriented ETFs generally outperform growth stocks during periods of high inflation, especially in the short term. The largest dividend ETF by AUM is the Vanguard Dividend Appreciation ETF (VIG).What is considered the best ETF? ›
1. Vanguard Total Stock Market ETF (VTI VTI 0.0% ) Vanguard Total Stock Market ETF is the keystone ETF for a portfolio of the best ETFS to buy now.What to invest in Vanguard 2023? ›
- The Best Vanguard ETFs of June 2023.
- Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)
- Vanguard S&P 500 Index Fund ETF (VOO)
- Vanguard Emerging Markets Government Bond ETF (VWOB)
- Vanguard Value Index Fund ETF (VTV)
- Vanguard Total International Stock Index Fund ETF (VXUS)
Vanguard FTSE Social Index Fund (VFTNX)
It also excludes stock of companies that do not meet certain labor, human rights, diversity and environmental requirements. The fund's 12.86% average annual return makes it Vanguard's top ESG fund by performance over the past decade.
|Dimensional Fund Advisors LP||2,461,571||8.37%|
|Vanguard Group, Inc. (The)||2,125,031||7.22%|
|Wellington Management Group, LLP||1,463,987||4.98%|
Now is a great time to load up on quality ETFs.
The stock market has been rough this year, which can make it a daunting time to invest. But this volatility will pass, and over the long term, it's extremely likely the market will see positive average returns.
- Vanguard 500 Index Fund (VFIAX) ...
- Vanguard Total Stock Market Index Fund (VTSAX) ...
- Vanguard Total Bond Market Index Fund (VBTLX) ...
- Vanguard Balanced Index Fund (VBIAX) ...
- Vanguard Growth Index Fund (VIGAX) ...
- Vanguard Small Cap Index Fund (VSMAX)
Do You Save Money If You Buy From Vanguard Directly? In many cases, buying and selling Vanguard funds directly through Vanguard is less expensive than making a purchase through a broker. That's because Vanguard has low to non-existent fees and commissions and most brokers charge commissions.What are the 3 dividend stocks to buy and hold forever? ›
|Stock||Forward Dividend yield|
|Cisco Systems Inc. (ticker: CSCO)||3.2%|
|Verizon Communications Inc. (VZ)||7.3%|
|Honeywell International Inc. (HON)||2.2%|
|Goldman Sachs Group Inc. (GS)||3.1%|
|ETF Symbol||ETF Name||Performance|
|QCLN||First Trust NASDAQ Clean Edge Green Energy Index Fund||228.47%|
|RTH||VanEck Retail ETF||224.84%|
|PPA||Invesco Aerospace & Defense ETF||221.25%|
|SPY||Performance Benchmark: SPDR S&P 500 ETF Trust||153.94%|
|Name||Price||Analyst Price Target|
|XRX Xerox||$14.78||$15.33 (3.72% Upside)|
|IBM International Business Machines||$132.42||$146.56 (10.68% Upside)|
|CVX Chevron||$156.26||$188.58 (20.68% Upside)|
|EOG EOG Resources||$111.92||$146.35 (30.76% Upside)|
But without knowing your background, Buffett would almost certainly advise investing in an S&P 500 index fund like VOO. He understands that it's a good long-term bet for most people.Why is VTI so popular? ›
VTI is an extremely diversified fund. Its large amount of holdings reflect the entire universe of investable U.S. securities. The fund has exposure to small-cap stocks which can be more volatile than mid- or large-cap holdings. The fund has a beta of 1 when compared to the larger market.Should I own both VOO and VTI? ›
Does it make sense to have both VTI and VOO? For most investors, it probably doesn't make sense to own both. VTI and VOO both provide great diversification at a low cost. However, you may find that your retirement plan at work doesn't offer a total stock market index fund like VTI.What is the 7 day ETF rule? ›
Availability and Scope of the ETF Rule
maintain their exchange listing may no longer rely on the ETF Rule and must satisfy individual redemption requests within seven days pursuant to Section 22(e) of the 1940 Act or liquidate if not listed on an exchange. See ETF Release at 61.
The opening 9:30 a.m. to 10:30 a.m. Eastern Time (ET) period is often one of the best hours of the day for day trading, offering the biggest moves in the shortest amount of time. A lot of professional day traders stop trading around 11:30 a.m. because that is when volatility and volume tend to taper off.Do you pay taxes on ETFs every year? ›
While ETFs are incredibly tax-efficient, that doesn't mean they're tax-free. They will pass on capital gains to their investors when the underlying assets perform well. This is referred to as a capital gains distribution.What is the 70 30 rule ETF? ›
A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.How many ETFs should I own as a beginner? ›
The majority of individual investors should, however, seek to hold 5 to 10 ETFs that are diverse in terms of asset classes, regions, and other factors. Investors can diversify their investment portfolio across several industries and asset classes while maintaining simplicity by buying 5 to 10 ETFs.
How the 4% Rule Works. The 4% rule is easy to follow. In the first year of retirement, you can withdraw up to 4% of your portfolio's value. If you have $1 million saved for retirement, for example, you could spend $40,000 in the first year of retirement following the 4% rule.What is the safest ETF? ›
1. Vanguard S&P 500 ETF (VOO 1.47%) Legendary investor Warren Buffett has said that the best investment the average American can make is a low-cost S&P 500 index fund like the Vanguard S&P 500 ETF.What is Vanguard's average rate of return? ›
|Average annual return||8.77%|
|Best year (1933)||40.57%|
|Worst year (1931)||–27.58%|
|Years with a loss||22 of 94|
In the last 30 Years, the Vanguard S&P 500 (VOO) ETF obtained a 9.80% compound annual return, with a 14.96% standard deviation. In 2022, the ETF granted a 1.37% dividend yield. If you are interested in getting periodic income, please refer to the Vanguard S&P 500 (VOO) ETF: Dividend Yield page.What ETFs benefit from inflation? ›
- The Best ETFs To Beat Inflation.
- Vanguard Short-Term Inflation Protected Securities ETF (VTIP)
- SPDR SSGA Multi-Asset Real Return ETF (RLY)
- ProShares Inflation Expectations ETF (RINF)
- Schwab U.S. REIT ETF (SCHH)
- Invesco DB Commodity Index Tracking ETF (DBC)
- Vanguard Total World Stock ETF (VT)
- Real estate. Real estate is almost always an excellent investment and should be at the top of your list. ...
- Savings bonds. ...
- Stocks. ...
- Silver and gold. ...
- Commodities. ...
- Equities. Equities generally offer a reliable haven during inflationary times. ...
- Real Estate. Real estate is another tried-and-true inflationary hedge. ...
- Commodities (Non-Gold) ...
- Treasury Inflation-Protected Securities (TIPS) ...
- Savings Bonds. ...
- Try out affiliate marketing.
- Sell an online course.
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- Start an e-commerce store.
- Get paid to complete surveys.
We've revised our forecast for 2023 GDP to no growth from a previous forecast for a contraction of around 1.0%. We've ratcheted down our 2024 growth forecast from 0.6% to 0.2%, reflecting the impact of a likely higher BOE terminal rate.What stock will go up the most in 2023? ›
|Company and ticker symbol||Performance in 2023|
|Meta Platforms (META)||120.0%|
|Advanced Micro Devices (AMD)||82.5%|
- Bank of America's Best Growth Stocks of 2023.
- Amazon (AMZN)
- Constellation Energy (CEG)
- Chipotle Mexican Grill (CMG)
- Alphabet (GOOG, GOOGL)
- Eli Lilly (LLY)
- Match (MTCH)
- Progressive (PGR)
- Vanguard 500 Index Fund ETF (NYSE:VOO)
- Vanguard Total Stock Market Index Fund ETF (NYSE:VTI)
- Vanguard Small-Cap Index Fund ETF (NYSE:VB)
- Vanguard Energy Index Fund ETF (NYSE:VDE)
- Vanguard Health Care Index Fund ETF (NYSE:VHT)
- Top 5 stock holdings are AAPL, MSFT, AMZN, NVDA, GOOGL, and represent 14.91% of Vanguard Group's stock portfolio.
- Added to shares of these 10 stocks: Linde (+$16B), AAPL (+$5.2B), GEHC (+$3.0B), XOM (+$2.7B), MSFT (+$2.0B), MRK (+$1.8B), PCAR (+$1.7B), MNST (+$1.7B), BRK.
Fidelity and Vanguard are two of the largest investment companies in the world. Fidelity boasts 40 million individual investors and $9.9 trillion in assets under management (AUM). Meanwhile, Vanguard has more than 30 million investors and $8.5 trillion in assets under management.Who actually owns Vanguard? ›
Vanguard isn't owned by shareholders. It's owned by the people who invest in our funds. Our owners have access to personalized financial advice, high-quality investments, retirement tools, and relevant market insights that help them build a future for those they love. That's the Value of Ownership.Does Vanguard have a high dividend ETF? ›
Vanguard High Dividend Yield ETF is an exchange-traded share class of Vanguard High Dividend Yield Index Fund. Stocks included in the High Dividend Yield Index have a history of paying above-average dividends.Should I buy Vanguard High Dividend Yield ETF? ›
Vanguard High Dividend Yield ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VYM is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market.Is Vanguard High Dividend Yield ETF a good investment? ›
Vanguard High Dividend Yield ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.Is there an ETF for Vanguard Dividend Growth Fund? ›
Vanguard Dividend Appreciation ETF seeks to track the investment performance of the S&P U.S. Dividend Growers Index, which consists of common stocks of companies that have a record of increasing dividends over time.What ETF pays the highest dividend per share? ›
|FLRU||Franklin FTSE Russia ETF||24696.43%|
|SOGU||AXS Short De-SPAC Daily ETF||76.49%|
|PYPT||AXS 1.5X PYPL Bull Daily ETF||58.92%|
|KBA||KraneShares Bosera MSCI China A 50 Connect Index ETF||53.31%|
The average price target for VYM is $120.88. This is based on 3634 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $143.60 ,the lowest forecast is $101.54. The average price target represents N/A Increase from the current price of N/A.What is the average yearly return for Vanguard ETF? ›
In the last 30 Years, the Vanguard S&P 500 (VOO) ETF obtained a 9.73% compound annual return, with a 14.96% standard deviation. In 2022, the ETF granted a 1.37% dividend yield. If you are interested in getting periodic income, please refer to the Vanguard S&P 500 (VOO) ETF: Dividend Yield page.Is it better to buy dividend stocks or dividend ETFs? ›
Dividend ETFs or Dividend Stocks: Which Is Better? Dividend ETFs can be a good option for investors looking for a low-cost, diversified and reliable source of income from their investments. Dividend stocks may be a better option for investors who prefer to choose their own investments.What are the cons of a high dividend ETF? ›
Cons. No guarantee of future dividends. Stock price declines may offset yield. Dividends are taxed in the year they are distributed to shareholders.What is a good dividend yield? ›
What Is a Good Dividend Yield? Yields from 2% to 6% are generally considered to be a good dividend yield, but there are plenty of factors to consider when deciding if a stock's yield makes it a good investment. Your own investment goals should also play a big role in deciding what a good dividend yield is for you.Which is better VIG or VYM? ›
Expense ratio: VIG and VYM have the same low expense ratio of just 0.06, or $6 for every $10,000 invested. Yield: VYM's 30-day SEC yield of 3.09% beats that of VIG's 1.89% yield. Performance: VIG has consistently outperformed VYM in the long term, whereas VYM has edged out VIG in the short term.How much does Vanguard High Dividend Yield ETF pay dividends? ›
There are typically 4 dividends per year (excluding specials), and the dividend cover is approximately 1.0. Our premium tools have predicted Vanguard High Dividend Yield Indx ETF with 92% accuracy.
Dividend Growth has topped Dividend Appreciation over most trailing periods. VIG lags VDIGX by an average of 0.61 percentage points annually over the past 10 years. But Dividend Appreciation has been on top in some years, and Dividend Growth can't compete with the ETF's 0.06% annual expense ratio.How often does Vanguard Dividend Growth Fund pay dividends? ›
|Declare Date||Ex-Div Date||Frequency|