Vanguard is well-known for its low-cost exchange-traded funds (ETFs), and they're typically among the cheapest, if not the very cheapest, on the market. So they're usually a great pick for investors looking to take advantage of the power of ETFs. But with more than 70 Vanguard ETFs available, which ones are the true standouts?
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Bankrate examined Vanguard's full line-up of ETFs and looked at each fund's long-term track record, expense ratio and why it might be a good fit for an investor's portfolio today. Below are some of the best ETFs across those dimensions.
(Note: Returns and data as of June 22, 2023.)
While its sister fund based on the S&P 500 index (ticker symbol: VOO) may get all the attention, the Vanguard S&P 500 Growth ETF has quietly outperformed its better-known sibling. Over the past 10 years, the fund has gone up more than 14 percent annually by focusing exclusively on the growth stocks within the S&P 500. With a low expense ratio, that extra juice still doesn't cost much either.
10-year returns (annual): 14.6 percent
Expense ratio: 0.10 percent
Vanguard's Mid-Cap Growth ETF contains a collection of medium-sized growth stocks. It tracks the performance of the CRSP U.S. Mid Cap Growth Index using a passively managed approach. The fund sports a tremendously cheap expense ratio and has generated attractive annual returns.
10-year returns (annual): 10.0 percent
Expense ratio: 0.07 percent
Want to invest in the total market at an incredibly low price? The Vanguard Total Stock Market ETF includes large, medium and small companies across both growth and value styles, giving you exposure to more than 4,000 companies in total. The expense ratio is tiny, too.
10-year returns (annual): 11.4 percent
Expense ratio: 0.03 percent
The Total World Stock ETF gets you diversified exposure to more than 9,000 companies across the world. It also handily outpaced Vanguard's other international ETFs over the last decade. On top of that, you get it all for a bargain-basement expense ratio.
10-year returns (annual): 8.0 percent
Expense ratio: 0.07 percent
Vanguard provides exposure to all 11 sectors of the market with individual ETFs, and none has been more red-hot over the last decade than information technology, racking up about a huge annual return. At a very low cost, this fund gets you concentrated exposure to this sector of the market, which includes top names such as Apple, Nvidia and Microsoft.
10-year returns (annual): 19.8 percent
Expense ratio: 0.10 percent
With interest rates climbing over the near term, it can make sense to have a bond fund that won't be hurt by rising rates and whose payout will rise as long as rates do. This short-term Treasury ETF fits the bill, and it invests in U.S. bonds with a dollar-weighted maturity of one to three years.
10-year returns (annual): 0.7 percent
Expense ratio: 0.04 percent
This short-term corporate bond ETF keeps your bond allocation nimble, which can be valuable as rates have been rising recently. Because it invests in high-quality short-term bonds, this fund will fluctuate less if rates move higher. Plus, as rates rise, the fund will reinvest its portfolio in newer higher-yielding bonds over time, pushing up the payout on this fund.
10-year returns (annual): 1.7 percent
Expense ratio: 0.04 percent
Vanguard is one of the leaders in low-cost index investing, so if you're looking to invest using index funds - a very smart way to go - then it's worthwhile to check out their selection of ETFs. You'll get a choice of funds without the high expenses, helping you keep more of your money in your own pocket.
- Bankrate's Brian Baker contributed to an update of this story.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.