Vanguard Investments offers investors a large variety of high-quality no-load mutual funds and exchange-traded funds (ETFs). Therefore finding the best Vanguard funds can be challenging, to say the least, because there are so many to choose from. In this article we make the job of finding the best Vanguard funds easier for you.
There are low-cost index funds, actively managed mutual funds, sector funds and more at Vanguard. To arrive at the best Vanguards, we looked for funds in five diverse categories, then looked at a combination of low expenses and long-term performance.
So without further ado, and in no particular order, here are five top funds to buy at Vanguard, all of which represent different mutual fund categories.
5 of the Best Vanguard Funds From 5 Different Categories
- Vanguard Total Stock Market Index (VTSAX): This is the biggest mutual fund in the world for good reason. VTSAX passively covers the entire U.S. stock market in one fund. Therefore investors get exposure to thousands of stocks in one cheap fund. And like many of the cheapest stock funds, long-term performance tends to beat the majority of actively-managed funds, especially for 10-year periods and longer. As of April 28, 2020, the expense ratio for VTSAX was a rock bottom 0.04%.
- Vanguard Total Bond Market Index (VBTLX): Like VTSAX, this fund invests in the entire U.S. market, except in the case of VBTLX, it's the entire bond market. The combination of low expenses and broad diversification makes VBTLX hard to beat, especially in the long run. Expenses for VBTLX were just 0.05% as of April 28, 2020.
- Vanguard Total International Stock Index (VTIAX): Continuing the theme of capturing large portions of the stock market with one low-cost mutual fund, VTIAX offers exposure to more than 7,400 stocks outside of the U.S. As a passively-managed index fund that tracks an index, don't expect VTIAX to be a top performer in the short run but the long-term returns, such as those of 10 years or longer, can be expected to be above average and ahead of the majority of actively-managed funds. Expenses for VTIAX are extremely low for an international stock fund at just 0.11% as of February 26, 2021.
- Vanguard Wellesley Income Fund Investor Shares (VWINX): Other than index funds, Vanguard offers many outstanding actively-managed funds, such as VWINX, which is a balanced fund. Also called asset allocation funds, balanced funds hold a mix of stocks, bonds and cash that reflects the fund's primary objective, which is usually categorized as conservative, moderate or aggressive. VWINX is one of the best conservative funds you can buy. It's allocation normally fluctuates around 40% stocks and 60% bonds but the long-term returns have historically looked as good as moderate allocation funds. As of January 31, 2021, expenses are extremely low for an actively-managed fund at 0.23%.
- Vanguard Health Care Fund Investor Shares (VGHCX): Vanguard also offers sector funds and VGHCX is one of the best and oldest on the market. Focusing on healthcare stocks, such as Bristol-Myers Squibb (BMY) and UnitedHealth Group (UNH), VGHCX is one of the best performing funds over the past 20 years. Benefiting from an aging population and advances in biotechnology and medical devices, VGHCX could be a top performer over the next decade or more. Expenses were just 0.32% as of May 29, 2020.
Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.