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Investors love Vanguard products. 82% of our funds have performed better than their peer-group averages over the past 10 years.*

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Lower your investment risk by choosing a mutual fund instead of an individual stock or bond.

Vanguard pioneered low-cost mutual fund investing. Our current fund lineup includes a wide selection of both index funds and actively managed funds.

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Exchange-traded funds offer more flexibility than traditional funds.

You don't need thousands of dollars to purchase a Vanguard ETF. Low minimums, diversification, and low costs make these investments competitive.

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Add stability to your portfolio with CDs & bonds.

If your goal is to preserve capital and earn some income, consider fixed-income investments. Certificates of deposit (CDs) and bonds can also reduce volatility in your portfolio.

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Make your cash work for you.

It's a good idea to keep some cash available, in a lower-risk, easily accessible account. See what money market fund is right for you.

Choose a money market fund

Lower your investment risk by choosing a mutual fund instead of an individual stock or bond.

Vanguard pioneered low-cost mutual fund investing. Our current fund lineup includes a wide selection of both index funds and actively-managed funds.

Explore our mutual funds

Exchange-traded funds offer more flexibility than traditional funds.

You don't need thousands of dollars to purchase a Vanguard ETF. Low minimums, diversification, and low costs make these investments competitive.

See our ETF lineup

Want to invest in a specific stock or a bond? No problem.

With Vanguard Brokerage Services®, you can invest in your choice of stocks or bonds. It's up to you how much you want to control your investments.

Find a stock

Add stability to your portfolio with CDs & bonds.

If your goal is to preserve capital and earn some income, consider fixed-income investments. Certificates of deposit (CDs) and bonds can also reduce volatility in your portfolio.

Find CDs and bonds

Make your cash work for you.

It's a good idea to keep some cash available, in a lower-risk, easily accessible account. See what money market fund is right for you.

Choose a money market fund

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Over the past 10 years, more than 94% of our actively managed funds performed better than their peer-group averages.**

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You see the value in low fund costs. We do too. That's why we offer a broad selection of low-cost index funds and ETFs.

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*For the 10-year period ended December 31, 2020, 7 of 7 Vanguard money market funds, 57 of 70 Vanguard bond funds, 23 of 24 Vanguard balanced funds, and 95 of 122 Vanguard stock funds—for a total of 182 of 223 Vanguard funds—outperformed their Lipper peer-group average. Results will vary for other periods. Only funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company. The competitive performance data shown represent past performance, which is not a guarantee of future results. View fund performance

**For the 10-year period ended June 30, 2020, 9 of 9 Vanguard money market funds, 41 of 44 bond funds, 9 of 9 balanced funds, and 35 of 38 stock funds --or 94 of 100 actively managed Vanguard funds --outperformed their peer-group averages. Results will vary for other periods. Only funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company. The competitive performance data shown represent past performance, which is not a guarantee of future results.

Vanguard Personal Advisor Services and Vanguard Digital Advisor's services are provided by Vanguard Advisers, Inc. ("VAI"), a federally registered investment advisor. VAI is a subsidiary of The Vanguard Group, Inc. ("VGI"), and an affiliate of Vanguard Marketing Corporation ("VMC"). Neither Vanguard Personal Advisor Services, Vanguard Digital Advisor, VAI, VGI, nor VMC guarantees profits or protection from losses.

Vanguard Digital Advisor's services are provided by Vanguard Advisers, Inc. ("VAI"), a federally registered investment advisor. VAI is a subsidiary of VGI and an affiliate of VMC. All investing is subject to risk, including the possible loss of the money you invest. Neither Vanguard Digital Advisor, VAI, VGI, nor VMC guarantees profits or protection from losses.

Vanguard is client-owned. As a client-owner, you own the funds that own Vanguard.

ESG funds are subject to ESG investment risk, which is the chance that the stocks screened by the index sponsor for ESG criteria generally will underperform the stock market as a whole or that the particular stocks selected will, in the aggregate, trail returns of other funds screened for ESG criteria.

You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services commission and fee schedules directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.

All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.

Sours: https://investor.vanguard.com/investing/investment-products/

The 10 Best Low-Cost Index Funds

Low-cost index funds are those with low expense ratios, or annual management fees. Investors who focus on minimizing their investing costs can generate vastly superior returns over time since money lost to fees is money no longer compounding on itself in your investment account.

Many investors prefer index funds -- which are a type of exchange-traded fund (ETF) -- over mutual funds because of their lower expense ratios and tax-efficient nature. Index-tracking ETFs typically have low expense ratios because they are passively managed, which keeps operating expenses low. Passive investing strategies don't require any in-house stock analysis or active trading.

Choosing a low-cost index fund

Low-cost index funds fit into a few different categories. Understanding these different types can help you choose the best low-cost index fund for you:

  • Total U.S. stock market funds: Investing in total U.S. stock market funds, which track indexes that include all publicly traded U.S. companies, is a solid choice for ultra-minimalist investors who want broad-based exposure to the U.S. stock market.
  • S&P 500 index funds: Funds that track the S&P 500 offer one of the simplest ways to gain diversified exposure to America's largest companies.
  • Index funds by market segment: Investing in ETFs by market segment is another way to structure your low-cost index fund portfolio. Investing in index funds focused on large-cap, mid-cap, or small-cap companies can help you tailor your portfolio in accordance with your risk appetite.

You can also choose to invest in several of these types of low-cost index funds to maximize your portfolio's diversification.

Best low-cost index funds

These index funds have some of the lowest expense ratios:

Index Fund

Expense Ratio

Assets Under Management

Vanguard S&P 500 ETF(NYSEMKT:VOO)

0.03%

$739.5 billion

Vanguard Large-Cap ETF(NYSEMKT:VV)

0.04%$36.7 billion

Schwab U.S. Large-Cap ETF(NYSEMKT:SCHX)

0.03%

$30.4 billion

Vanguard Mid-Cap ETF(NYSEMKT:VO)

0.04%

$151.3 billion

Schwab U.S. Mid-Cap ETF(NYSEMKT:SCHM)

0.04%

$9.7 billion

Vanguard Small-Cap ETF(NYSEMKT:VB)0.05%$135.2 billion
iShares Core S&P Small-Cap ETF(NYSEMKT:IJR)0.06%$72.4 billion

Schwab U.S. Broad Market(NYSEMKT:SCHB)

0.03%

$21.2 billion

iShares Core S&P Total US Stock Market(NYSEMKT:ITOT)

0.03%

$39.6 billion

Vanguard Total Stock Market ETF(NYSEMKT:VTI)

0.04%

$1.2 trillion*

Data sources: Fund providers, ETFdb.com. *Includes both ETF and mutual fund classes.

Let's take a deeper dive into several of these low-cost index funds:

Vanguard Total Stock Market Index Fund ETF

If you want to hold a single index fund ETF that invests in the total U.S. stock market in the right proportions, then the Vanguard Total Stock Market Index Fund ETF is your best option. Holding shares in this fund makes owning other stocks or ETFs redundant unless you want to concentrate your portfolio's exposure in a particular segment of the market.

By holding shares in this fund, you'll hold large-, mid-, and small-cap companies proportional to the broader market — and at a bargain basement expense ratio.

For the set-it-and-forget-it investor, this strategy is very difficult to match from a time and cost efficiency perspective. Many fund management companies offer total market funds at similarly low costs.

Vanguard S&P 500 ETF

The Vanguard S&P 500 ETF tracks the S&P 500(SNPINDEX:^GSPC), the benchmark index weighted by market capitalization that includes America's 500 largest companies. The broad diversification of this fund is appealing to many investors. 

The S&P 500 is "self-cleansing," meaning that when a particular company no longer qualifies for inclusion in the index, it is removed and replaced by a growing company that does deserve to be included. The formulaic nature of the inclusion process ensures that only high-quality companies are listed by the S&P and invested in by the Vanguard S&P 500 ETF.

Vanguard Mid-Cap ETF

The Vanguard Mid-Cap ETF invests in companies with mid-range market values, typically between $2 billion and $10 billion. The mid-cap market segment includes companies with established businesses and reliable revenue streams, many of which have yet to grow into their full potential.

This ETF tracks the CRSP U.S. Mid-Cap Index by aiming to hold the same stocks as the index and in the same proportion. The fund's small expense ratio of 0.04% is competitive among mid-cap ETFs.

Vanguard Small-Cap ETF

The Vanguard Small-Cap ETF is an attractive option if you want to invest in companies that have the most growth potential. This fund tracks the CRSP U.S. Small-Cap Index, which focuses on U.S. companies in the bottom 15% to bottom 2% by market cap.

Investing in a low-cost, small-cap index fund ETF like the Vanguard Small-Cap ETF can boost your overall returns. But, due to its small-cap focus, the performance of this ETF can be more volatile than other investments.

Is a low-cost index fund right for you?

Paying higher fees to invest in an actively managed fund erodes your ability to generate compound interest. While index funds are generally broad-based, you can gain additional portfolio exposure to specific market segments by allocating more money to specific stocks or funds in accordance with your investment preferences.

With the availability of so many low-cost index funds, there's little reason to pay more than the bare minimum in fees. Adding a low-cost index fund to your portfolio keeps more of your hard-earned money in your own pocket.

Sours: https://www.fool.com/investing/how-to-invest/index-funds/low-cost-index-funds/
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See the difference low-cost funds can make

See the potential impact Vanguard's low-cost funds can have on your savings over time compared with the industry average. Your savings have the potential to grow even more when you're invested for longer periods of time.

All examples assume an initial investment of $50,000 earning 6% each year.

At Vanguard you could save $7,527 over 10 years based on Vanguard's average expense ratio of 0.19%, which results in a cost of $1,687 in this scenario, compared with the industry average expense ratio of 1.08%, which results in a cost of $9,214.

Over 20 years, you could save $25,318 based on costs of $5,985 at Vanguard compared with $31,303 at the industry average. Stay invested for 30 years and you could save $63,915 based on costs of $15,926 at Vanguard compared with $79,841 at the industry average.

If the rate of return were altered, results would vary from the hypothetical examples provided. The final balances described are after costs. These examples do not represent any particular investment and do not account for inflation. There may be other material differences between investment products that must be considered prior to investing.

All averages are asset-weighted. Industry averages exclude Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2020.

Sours: https://investor.vanguard.com/mutual-funds/low-cost
Vanguard Index Funds: A Complete Beginner's Guide to Investing

15 Best Vanguard Mutual Funds for Investors of All Stripes

When it comes to Vanguard mutual funds, you might think the universe of offerings is so large that it's impossible to pick the right options. We wouldn't blame you: Vanguard is one of the world's leading asset managers, with a staggering $7 trillion under management.

However, the truth is that Vanguard's mutual funds have risen to such dominance not because they are overly complex or numerous. The investment giant actually only offers about 130 or so mutual funds – many of which have been around and followed the same plan for decades.

That's the appeal of Vanguard: a tried-and-true approach to cost-effective, hands-off investing. You'll find super cheap index funds that are typical from Vanguard on this list of top mutual funds, but you'll also find actively managed options for investors who simply need help making sense of the markets.

Here are 15 of the best Vanguard mutual funds that span a variety of investing strategies. No matter what type of investor you are, you should be able to find at least a couple useful, low-cost options that align with your goals.

Data is as of July 22. Fund yields represent the trailing 12-month yield, which is a standard measure for equity funds, unless otherwise noted. Minimum initial investment for all funds listed here is $3,000.

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Vanguard 500 Index Fund Admiral Shares

Vanguard 500 Index Fund Admiral Shares
  • Fund category: Large blend
  • Assets under management: $241.2 billion
  • Yield: 1.3%
  • Expense ratio: 0.04%, or $4 annually for every $10,000 invested

Vanguard 500 Index Fund Admiral Shares (VFIAX, $403.40) became Wall Street's very first index fund in 1975 at the behest of Vanguard founder Jack Bogle. Today, it remains one of the most popular ways to gain diversified exposure to the U.S. equity market in a single holding.

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This Vanguard mutual fund is deceptively simple, offering investors exposure to 500 mostly U.S.-based large- and mid-cap companies, which currently includes popular stocks such as Apple (AAPL), Microsoft (MSFT) and Nvidia (NVDA). In fact, because many of the largest companies on the planet are tech giants like these, information technology makes up about 27% of the entire fund.

Generally, Vanguard 500 Index is seen as a diversified and cost-effective core holding for almost any investor type that wants exposure to publicly traded U.S. companies. That makes it one of the best Vanguard mutual funds for just about any style of investor.

Note: VFIAX also trades as an ETF, the Vanguard S&P 500 ETF (VOO).

Learn more about VFIAX at the Vanguard provider site.

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Vanguard Total Stock Market Index Fund Admiral Shares

Vanguard Total Stock Market Index Fund Admiral Shares
  • Fund category: Large blend
  • Assets under management: $257.6 billion
  • Yield: 1.3%
  • Expense ratio: 0.04%

Looking beyond just the biggest stocks on Wall Street, Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX, $109.58) allows investors to take exposure to some 3,800 total positions. As the name implies, this accounts for almost the entire domestic stock market.

However, because VTSAX is weighted by size, it's still heavily invested in big tech stocks, with the sector accounting for the same share (27%) as VFIAX thanks largely to the same group of trillion-dollar Silicon Valley giants. Furthermore, the top 10 positions overall make up 22% of the entire portfolio despite the fact that thousands of other companies have fractional stakes in the makeup of this Vanguard mutual fund.

That results in a portfolio with a 70-17-6 large-mid-small blend for VTSAX, versus 85-15-0 for VFIAX – so, mildly more diversified by size, but still beholden to large-cap stocks. But that's enough of a difference for many investors to prefer Vanguard Total Stock Market Index over Vanguard 500.

Note: VTSAX also trades as an ETF, the Vanguard Total Stock Market ETF (VTI).

Learn more about VTSAX at the Vanguard provider site.

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Vanguard Total International Stock Index Fund Admiral Shares

Vanguard Total International Stock Index Fund Admiral Shares
  • Fund category: Foreign large blend
  • Assets under management: $48.6 billion
  • Yield: 2.4%
  • Expense ratio: 0.11%

Looking beyond U.S. stocks, the Vanguard Total International Stock Index Fund Admiral Shares (VTIAX, $34.88) allows investors to supplement their core holding of U.S. stocks with international stocks – without overlapping positions. That's because VTIAX is ex-U.S., meaning it excludes all domestic stocks from the list of some 7,500 total holdings.

Right now, the region that dominates Vanguard Total International Stock Index is Europe, with about 40% of total assets in stocks such as Swiss foods giant Nestle SA (NSRGY) and French fashion and consumer goods giant LVMH Moet Hennessy Louis Vuitton (LVMUY). However, emerging markets are still well represented with more than 25% of assets tied up in regions including China, India and Brazil.

If you want to stick with the best Vanguard mutual funds as you supplement your core domestic holdings, VTIAX is a cheap and simple way to do so.

Note: VTIAX also trades as an ETF, the Vanguard Total International Stock ETF (VXUS).

Learn more about VTIAX at the Vanguard provider site.

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Vanguard International Explorer Fund

Vanguard International Explorer
  • Fund category: Foreign small/mid growth
  • Assets under management: $2.8 billion
  • Yield: 1.0%
  • Expense ratio: 0.39%

Of course, a huge list of multinational stocks might not ultimately give you more diversification. Nestle is, after all, just as dependent on U.S. consumer tastes as many other domestic food companies. So, why not layer a more qualitative approach to your international investments instead of just picking big overseas stocks?

That's what Vanguard International Explorer Fund (VINEX, $22.46) does. The actively managed portfolio of roughly 530 foreign companies takes a more strategic tack than simply investing in big multinationals with recognizable names. For instance, top holdings include Dutch semiconductor company ASM International NV (ASMIY) and Japanese pharmaceutical firm Nippon Shinyaku – two firms that most U.S. investors probably haven't heard of, but that have nonetheless greatly outperformed the S&P 500 so far in 2021.

Furthermore, many of Vanguard International Explorer's holdings aren't easily accessed by the typical domestic investor. That's the real value of VINEX over the typical ex-U.S. index fund that focuses on high-profile multinationals.

If you're looking for true overseas growth potential, VINEX is likely one of the best Vanguard mutual funds for you.

Learn more about VINEX at the Vanguard provider site.

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Vanguard Dividend Growth Fund

Vanguard Dividend Growth Fund
  • Fund category: Large blend
  • Assets under management: $51.2 billion
  • Yield: 1.5%
  • Expense ratio: 0.26%

The Vanguard Dividend Growth Fund (VDIGX, $37.40) emphasizes stability and income growth in a simple and cost-effective way.

How simple? Just more than 40 stocks make up this fund right now, with companies including healthcare giant Johnson & Johnson (JNJ), fast food icon McDonald's (MCD) and insurer UnitedHealth Group (UNH) near the top of the list.

Manager Donald Kilbride's mission is to target high-quality, typically large-cap companies that demonstrate the potential for (and typically the existing practice of) raising dividends. But sheer yield isn't the point – hence the 1.5% current yield, while modestly better than the S&P 500's 1.3% yield, is hardly a game-changing amount of income.

It's worth noting that while these entrenched stocks are more stable than the typical growth-oriented tech company that doesn't pay a dividend, this stability can result in investors leaving profits on the table when things are going well for Wall Street. Case in point: Even accounting for dividends, VDIGX has underperformed the S&P so far in 2021.

But if stability and income growth are important to you, VDIGX is one of the best Vanguard mutual funds you can buy. Morningstar notes that the fund offers extremely low risk compared to its peers in the large blend category.

Learn more about VDIGX at the Vanguard provider site.

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Vanguard Selected Value Fund

Vanguard Selected Value Fund
  • Fund category: Mid-cap value
  • Assets under management: $6.7 billion
  • Yield: 1.1%
  • Expense ratio: 0.31%

Value investing involves looking for companies that have inherent value in their operations and aren't as reliant on future growth plans or the whims of Wall Street.

The Vanguard Selected Value Fund (VASVX, $30.26) is a respected option for those interested in this strategy. VASVX comprises about 120 stocks, primarily (93%) in the U.S., and commands a little less than $7 billion in assets under management.

Unlike some of the bigger and more passive index funds out there, actively managed Vanguard Selected Value's targeted approach and a focus on mainly mid-sized companies allows it to chase "deep value" investments instead of just the typical list of large cap consumer staples stocks you normally might see.

Case in point: Top holdings right now include Dublin-based airport lease company AerCap Holdings (AER), Canadian apparel company Gildan Activewear (GIL) and midsize American enterprise computing firm Arrow Electronics (ARW).

If you're stuck in the same old blue chips, this is one of the best Vanguard mutual funds for a breath of fresh air.

Learn more about VASVX from the Vanguard provider site.

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Vanguard Explorer Fund

Vanguard Explorer Fund
  • Fund category: Small growth
  • Assets under management: $24.3 billion
  • Yield: 0.1%
  • Expense ratio: 0.41%

The flip side of value, of course, is growth. And the Vanguard Explorer Fund (VEXPX, $143.96) represents one of the best Vanguard mutual funds for those wanting to look beyond large-cap stocks to find growth opportunities off the beaten path.

The portfolio at present boasts 750 or so total positions, but a median market capitalization of just $6.4 billion. That could be appealing to investors who are skeptical that mature trillion-dollar companies can continue to outperform and grow at significant rates forever.

VEXPX's managers have heavily concentrated more than two-thirds of assets into just three sectors: Information technology (23%), healthcare (22%) and industrials (20%). Top holdings at present include Irish medical diagnostics company Icon (ICLR), apparel retailer Burlington Stores (BURL) and Silicon Valley cloud software firm Five9 (FIVN).

Smaller companies carry more risk, naturally, but they also theoretically possess much more potential over the long term. VEXPX is an inexpensive way to harness this potential.

Note: VEXPX also trades as Admiral class shares (VEXRX).

Learn more about VEXPX at the Vanguard provider site.

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Vanguard Global Minimum Volatility Fund Investor Shares

Vanguard Global Minimum Volatility Fund Investor Shares
  • Fund category: World small/mid stock
  • Assets under management: $2.8 billion
  • Yield: 1.9%
  • Expense ratio: 0.21%

After the volatility of 2020, many investors started looking around for funds with a lower risk profile that would help preserve their nest egg in tough times. That's where the Vanguard Global Minimum Volatility Fund Investor Shares (VMVFX, $14.84) comes in, delivering a strategy that is designed to smooth out the bumps in the road for your portfolio.

To be clear, no investment is 100% risk free. But the actively managed fund specializes in both U.S. and foreign stocks that tend to "wiggle" less than their peers, which means VMVFX is more likely to hang tough when things go awry for Wall Street.

Perhaps unsurprisingly, the list of about 300 stocks is biased a bit toward healthcare (16%), technology (15%) and consumer staples (14%). Big tech mainstays such as Microsoft are among the top holdings, as this enterprise giant is too entrenched to go anywhere anytime soon, as are leading U.S. healthcare giants including J&J and Amgen (AMGN) that can rely on medical "customers" regardless of the broader economic environment.

A word of warning, however: While short-term disruptions are painful, the long-term trend of the stock market as a whole has always been higher. In fact, Vanguard warns in its official documentation that "we caution against expecting any low or minimum volatility investment to outperform, or even match, the global equity market over the long term."

In other words, VMVFX isn't an ideal path for growth. But it is one of the best Vanguard mutual funds for investors in need of a shorter-term insurance policy.

Note: VMVFX also trades as Admiral class shares (VMNVX).

Learn more about VMVFX at the Vanguard provider site.

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Vanguard FTSE Social Index Fund Admiral Shares

Vanguard FTSE Social Index Fund Admiral Shares
  • Fund category: Large growth (ESG)
  • Assets under management: $13.8 billion
  • Yield: 1.0%
  • Expense ratio: 0.14%

While recent events on Wall Street may have many thinking about volatility, recent events on Main Street also have many investors thinking hard about social responsibility in their portfolio – and how they can have confidence that they're backing companies that align with their personal values.

The Vanguard FTSE Social Index Fund Admiral Shares (VFTAX, $42.78) is one answer to this question. This fund is benchmarked to the FTSE4Good US Select Index, a market cap-weighted index composed of just under 500 large- and mid-capitalization stocks that are screened for environmental, social, and corporate governance criteria – known by the acronym of ESG by most investors.

To be clear, this is an "exclusionary" index, meaning it simply kicks out stocks that do not meet minimum human rights standards or that engage in gambling or fossil fuel production. So in many ways, the list is quite similar to your typical large-cap index fund, with search giant Alphabet (GOOGL), EV maker Tesla (TSLA) and big bank JPMorgan Chase (JPM) near the head of the class.

Still, if you're looking for a simple and cost-effective way to cut out Big Oil or firearms manufacturers, VFTAX could be a good fit.

Learn more about VFTAX at the Vanguard provider site.

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Vanguard Total Bond Market Index Fund Admiral Shares

Vanguard Total Bond Market Index Fund Admiral Shares
  • Fund category: Intermediate-term core bond
  • Assets under management: $80.0 billion
  • SEC yield: 1.3%*
  • Expense ratio: 0.05%

So far there have been a lot of Vanguard mutual funds on this list to play the stock market in various ways. However, bonds remain an important part of any well-rounded and long-term portfolio, both to provide reliable income as well as a way to smooth out volatility and reduce your risk profile.

The Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX, $11.42) is one of the best Vanguard mutual funds for fixed-income investors. It's a massive, simple and inexpensive way to gain broad exposure to U.S. "investment-grade" bonds. 

Primarily, the fund invests in U.S. Treasuries and mortgage-backed securities (MBSes) of all maturities, from bonds due in just a few years to long-term issues that won't mature for a few decades. About two-thirds of the fund is in these government-backed bonds, while the rest is in top-tier corporations including issuers such as Bank of America (BAC).

Unfortunately, with interest rates steadily sliding lower over the last several years, Vanguard Total Bond Market Index yields a mere 1.3%. However, that's about the same as the S&P 500 – and considering the U.S. Treasury and high-quality corporate bonds are a lot more stable than your average stock, that payday comes with a significantly lower risk profile.

Just be aware that, as with other bond funds out there, increases in interest rates might cause the price of the bonds in the portfolio to decrease in face value. So if rates start to rise, VBTLX could experience some short-term pain.

Note: VBTLX also trades as an ETF, the Vanguard Total Bond Market (BND).

* SEC yield reflects the interest earned after deducting fund expenses for the most recent 30-day period and is a standard measure for bond and preferred-stock funds.

Learn more about VBTLX at the Vanguard provider site.

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Vanguard Short-Term Treasury Fund Investor Shares

Vanguard Short-Term Treasury Fund Investor Shares
  • Fund category: Short-term government bond
  • Assets under management: $7.9 billion
  • SEC yield: 0.0%
  • Expense ratio: 0.20%

If stability and safety are your primary goals, the Vanguard Short-Term Treasury Fund Investor Shares (VFISX, $10.71) is an alternative to VBLTX's whole universe of investment-grade bonds, instead focusing solely on short-term Treasury bonds.

This reduces your risk profile significantly in two important ways. For starters, you're not taking on any corporate debt and instead rely wholly on the U.S. government as the borrower of choice. If Uncle Sam goes bankrupt, we all have much bigger problems than our 401(k), after all.

Secondly, it's important to understand that the "duration" of these loans to the government are only just a few years; right now, the average duration of bonds held by VFISX is just 1.9 years, which effectively means a 1-percentage-point increase in rates should cause VFISX to decline by just 1.9%.

The farther out in time you go the harder it is to predict things, but even if you believed Washington was going to be doomed eventually, a mere two years isn't a lot of time for the entire Treasury Department to fall apart.

The big tradeoff for this level of certainty is the small premium investors get paid on these loans to the federal government. Specifically, the yield on VFISX right now is a measly 2 basis points (0.02%). Even in times of meager inflation, that return on your investment capital likely won't maintain its purchasing power over the next few years.

That's why many investors use this kind of fund as a short-term holding place for cash until they're ready to redeploy it.

Note: VFISX also trades as Admiral class shares (VFIRX).

Learn more about VFISX at the Vanguard provider site.

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Vanguard Inflation-Protected Securities Fund Investor Shares

Vanguard Inflation-Protected Securities Fund Investor Shares
  • Fund category: Inflation-protected bond
  • Assets under management: $37.0 billion
  • SEC yield: -1.7%
  • Expense ratio: 0.20%

Speaking of inflation, the actively managed Vanguard Inflation-Protected Securities Fund Investor Shares (VIPSX, $14.69) offers an interesting investment or hedge for those that are worried about rising prices over the long-term. This fund is designed to protect your portfolio through a focus on Treasury Inflation Protected Securities, or TIPS.

This special class of bonds is not only backed by the full faith and credit of the federal government, but it's also indexed to inflation. In other words, should runaway inflation hit, you will see the value of VIPSX increase in kind to protect you.

This might sound so good, you wonder why any investor would ever go after conventional bonds in an inflationary environment. However, it's important to note that the potential gain in principal value you'll enjoy is offset – or depending on market conditions, sometimes more than offset – by a reduction in yield. Consider that the specter of inflation has caused the yield on recently issued TIPS to actually turn negative, with VIPSX yielding -1.7% at present.

This is a real risk in TIPS, which saw negative yields for the first time in 2010 after fears of inflation in the wake of the global financial crisis and related government bailouts. It's also worth noting that despite these fears, inflation ran at a roughly 1.6% annualized rate in 2010 – hardly enough to justify those negative yields.

But if you're really concerned about inflation, VIPSX is one of the best Vanguard mutual funds you can buy.

Note: VIPSX also trades as Admiral class shares (V).

Learn more about VIPSX at the Vanguard provider site.

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Vanguard High-Yield Corporate Fund Investor Shares

Vanguard High-Yield Corporate Fund Investor Shares
  • Fund category: High-yield bond
  • Assets under management: $29.6 billion
  • SEC yield: 2.8%
  • Expense ratio: 0.23%

If you're interested in income from the bond market, then the Vanguard High-Yield Corporate Fund Investor Shares (VWEHX, $6.00) is worth a look. This actively managed fund is well established, with about $30 billion in total assets under management, and ranks as one of Kiplinger's 25 favorite mutual funds.

VWEHX seeks a higher level of income than is normally provided by more credit-worthy borrowers in the bond market by investing primarily in corporate securities from slightly tarnished firms. Among the positions in the fund right now are bonds from printing producer Xerox (XRX) and casino operator Caesars Entertainment (CZR). Obviously, there's more risk in lending to companies like this than mega-cap mainstays, but there's also a better rate of return on that investment if these companies continue to make good on their debt payments.

How much better is that rate of return? The current SEC yield of 2.8% is more than double the yield on the S&P 500, and considerably better than most large-cap dividend funds and investment-grade bond funds.

Also, with more than 600 different bonds to build in some diversification, chances are that even if a few of these investments go south, Vanguard High-Yield Corporate will remain a solid performer in the long term.

Note: VWEHX also trades as Admiral class shares (VWEAX).

Learn more about VWEHX at the Vanguard provider site.

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Vanguard Wellington Fund Investor Shares

Vanguard Wellington Fund Investor Shares
  • Fund category: Allocation (50%-70% equity)
  • Assets under management: $120.3 billion
  • Yield: 1.7%
  • Expense ratio: 0.24%

The nearly century-old Vanguard Wellington Fund Investor Shares (VWELX, $49.03) isn't just one of the best Vanguard mutual funds on offer. It's also the oldest, and it also claims to be the nation's oldest "balanced" fund, looking to allocate investors into a mix of stocks and bonds for a more diversified approach than sticking to just one asset class.

Founded in 1929, this Kiplinger 25 selection aims to keep about two-thirds of the portfolio in stocks and the other third in bonds for broad diversification. Though bonds are the "smaller" part of the portfolio, VWELX still holds nearly 1,100 different debt issues, giving this fund a very diversified view of this asset class.

Conversely, while stocks represent two-thirds of the total portfolio, Wellington's managers only have 60 total positions at the moment. That said, the mix of industries is still decent; technology is the largest sector by weighting (20%), but five other sectors rank around 10% or more for a broad look at the equities market.

All this balance comes at a very low cost, with a fee structure that is quite affordable when compared with other diversified asset allocation funds.

Editor's note: VWELX and the Admiral class VWENX shares are currently closed to new investors unless they purchase directly through a Vanguard brokerage account.

Learn more about VWELX at the Vanguard provider site.

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Vanguard LifeStrategy Growth Fund

Vanguard LifeStrategy Growth Fund
  • Fund category: $20.8 billion
  • Assets under management: $20 billion
  • Yield: 1.6%
  • Expense ratio: 0.14%

Rounding out this list of the top Vanguard mutual funds is one of its premier "funds of funds" – the Vanguard LifeStrategy Growth Fund (VASGX, $44.11), which is an amalgamation of other offerings, including some of the picks already mentioned on this list.

The idea is pretty simple: If you're an investor who wants to cover multiple asset classes and take a holistic approach to your portfolio instead of picking and choosing individual positions, VASGX will balance things out for you.

Right now, VASGX's five holdings include domestic equity fund Vanguard Total Stock Market at 49% of the fund, foreign stock fund Vanguard Total International (32%), Vanguard Total Bond Market II (VTBIX, 14%) to represent investment grade U.S. bonds, and then Vanguard Total International Bond Fund (VTABX) and Vanguard Total International Bond II Index Fund (VTIIX) providing overseas fixed-income exposure to round out the fund.

You have all your bases covered in one fund here. This is all many investors need to approach their portfolio in a single position. However, be aware that if you don't like this mix, you don't really have much say in customization of the fund.

Learn more about VASGX at the Vanguard provider site.

Sours: https://www.kiplinger.com/investing/mutual-funds/603157/best-vanguard-mutual-funds-investors-all-stripes

Low funds mutual vanguard cost

Vanguard Mutual Funds vs. Vanguard ETFs

Vanguard Mutual Funds vs. Vanguard ETFs: An Overview

Vanguard, one of the world's largest asset management firms with more than $7.2 trillion in assets under management as of January 31, 2021. has become a popular choice for investors thanks to its long list of low-cost mutual funds. The Vanguard Group has also added a full menu of exchange-traded funds (ETFs) to its lineup, making the company one of the leading providers for both investment products.

Most Vanguard index mutual funds have a corresponding ETF. Both products are similar in management style and returns, but there are differences that can make each product more appropriate to different investors. Vanguard's products also have expense ratio differences between mutual fund/ETF pairs that must be examined to make the best choice.

Key Takeaways

  • Mutual funds and ETFs offered by Vanguard are similar in management style and returns, but there are differences that can make each product more appropriate to different investors.
  • ETFs carry more flexibility; they trade like stocks and can be bought and sold throughout the day.
  • Mutual fund shares price only once per day, at the end of the trading day, but may benefit from economies of scale.
  • While Vanguard fees are low in many of its products, ETFs tend to be more tax-efficient.

Vanguard Mutual Funds

The mutual fund versus ETF debate for Vanguard products in part comes down to how much is being invested. Moreover, for many of its mutual funds, Vanguard offers up to three classes of shares, Investor Shares, Admiral Shares, and Institutional Shares, each class offering progressively lower expense ratios, and thus better performance, in return for higher minimum investments.

Investor Shares in most Vanguard mutual funds require a $3,000 minimum initial investment, but some allow a $1,000 opening investment. For lower-cost Admiral Shares, the typical minimums are $3,000 for index funds, $50,000 for actively-managed funds, and $100,000 for certain sector-specific index funds. Institutional Shares are designed for institutional investors, and typically have a $5 million minimum.

Some funds with high transaction costs may have redemption fees ranging from 0.25% to 1.00% of the transaction amount, to discourage short-term speculative trading. Apart from this exception, Vanguard does not charge front-end or back-end sales loads or commissions.

Vanguard ETFs

ETFs carry more flexibility; they trade like stocks and can be bought and sold throughout the day, in transaction amounts as little as one share. As of October 1, 2021, Vanguard offered 76 ETFs, with market prices per share ranging approximately from $51 to $407. In many cases, ETFs carry lower expense ratios than their mutual fund counterparts, but they must be traded in a brokerage account. ETF trades could come with brokerage commission fees.

When choosing between a mutual fund an an ETF, investors must consider a number of factors. One is whether the investor wants to pursue a buy-and-hold strategy or a trading strategy to help determine which product may be more advantageous. In general, ETFs may be more suitable than mutual funds for investors who seek lower minimum investment amounts and who want more control over transaction prices. However, investors who want to make regularly-scheduled automatic investments or withdrawals can do so with mutual funds, but not with ETFs.

Key Differences

The most significant difference between mutual funds and ETFs is the tradeability of shares. Mutual fund shares price only once per day, at the end of the trading day. Investors can place trade orders throughout the day, but the transaction is only completed at the end of the trading day.

The popular Vanguard 500 Index Fund and the Vanguard S&P 500 ETF provide good examples of the cost and trading differences that come with mutual funds and ETFs. Most mutual funds and ETFs in the Vanguard lineup follow a similar pattern.

Both ETFs and mutual funds are treated the same by the IRS in that investors pay capital gains taxes and taxes on dividend income. However, with generally fewer taxable events in ETFs, tax liability will typically be lower. ETF expense ratios are also typically lower than mutual fund fees. Although there are some options for mutual funds that don't require you to invest a lot of money at once, many mutual funds have higher initial investment requirements than ETFs.

The decision between a Vanguard mutual fund or a Vanguard ETF comes down to trading flexibility and the amount to be invested.

The Vanguard portfolio of investment choices as a whole is generally considered among the lowest cost and highest rated in the investment marketplace, and these products can make ideal choices for long- and short-term investors.

Sours: https://www.investopedia.com/articles/investing/112415/buying-vanguard-mutual-funds-vs-etfs.asp
Vanguard Portfolio Update October 2021 - Investing For Financial Independence UK

Low-cost, no-load funds are just the start


footnote*Vanguard average mutual fund expense ratio: 0.10%. Industry average mutual fund expense ratio: 0.63%. All averages are asset-weighted. Industry averages exclude Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2019

footnote**For the 10-year period ended December 31, 2020, 7 of 7 Vanguard money market funds, 57 of 70 Vanguard bond funds, 23 of 24 Vanguard balanced funds, and 95 of 122 Vanguard stock funds—for a total of 182 of 223 Vanguard funds—outperformed their Lipper peer-group average. Results will vary for other time periods. Only mutual funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company. The competitive performance data shown represent past performance, which is not a guarantee of future results. View fund performance

You must buy and sell Vanguard ETF Shares through a broker like Vanguard Brokerage Services (we offer them commission-free) or through another broker (you may incur commissions). See the Vanguard Brokerage Services commission and fee schedules for limits. Vanguard ETF Shares aren't redeemable directly with the issuing fund other than very large aggregations worth millions of dollars. Like stocks, ETFs are subject to market volatility. When buying or selling an ETF, you'll pay or receive the current market price, which may be more or less than net asset value.

All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.

Sours: https://investor.vanguard.com/mutual-funds/no-load-funds

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The 10 Cheapest Vanguard ETFs

In the four decades since its founding, the Vanguard Group has grown to be one of the largest investment companies in the world. At the core of that expansion has been a commitment to providing individual investors with low-cost solutions to gaining wealth. Vanguard is known for its mutual funds and is also a major player in the business of exchange-traded funds (ETFs).

Although other fund companies such as Schwab and Fidelity attempt to compete with Vanguard with low fees on selective funds, Vanguard can keep its low-cost edge across the fund spectrum based on a unique ownership structure.

Unlike other fund companies, which are either corporate-owned or owned by third-parties, Vanguard is owned by its funds. And the funds are thus owned by their investors. That means the profits generated by operating the funds are returned to investors in the form of lower fees. As such, it makes it very difficult for other companies, which are beholden to their shareholders, to compete on price.

Key Takeaways

  • Vanguard is a leading provider of low-cost ETFs.
  • ETFs can be evaluated in terms of expense ratios, but the holdings within the ETF and historical returns are important considerations as well.
  • Vanguards ETFs that invest in large-cap stocks include the S&P 500 ETF (VOO) and the Total Stock Market ETF (VTI).
  • Vanguard offers ETFs that invest in small-cap stocks, midcaps, value stocks, growth stocks, bonds, and international markets.

Vanguard quickly introduced its suite of ETFs when the investment product gained widespread popularity. The mutual fund operator has since become the second-largest provider of ETFs behind Blackrock. Vanguard’s unique cost structure, the economies of scale it has achieved, and the total number of assets under management (AUM) allow it to offer its ETFs at the lowest cost available in the market. 

Below are 10 of the firm's cheapest ETFs by expense ratio, with data current as of September 12, 2019.

The Vanguard S&P 500 ETF (VOO)

The Vanguard S&P 500 ETF is one of Vanguard’s lowest-cost ETFs with a 0.03% expense ratio. It is also among the largest with $490 billion in assets under management (AUM), according to Vanguard's website.

The fund seeks to track the performance of the Standard & Poor’s 500 Index. The portfolio thus holds the same 500 names as the index. The median market capitalization of companies in the fund is $115 billion and top holdings are Microsoft, Apple, Alphabet, Amazon, and Facebook. The top three sectors invested by the ETF included information technology, healthcare, and financials.

The Vanguard S&P 500 ETF returned 10.07% annually over the last five years and 2.85% during the past year. Year-to-date, shares returned 21.4%.

The Vanguard Total Stock Market ETF (VTI)

The Vanguard Total Stock Market ETF is Vanguard’s oldest and largest ETF with $830 billion in AUM. The fund covers the entire U.S. stock market for a rock bottom fee of 0.03%. The ETF holds approximately 3,600 stocks in its portfolio, with an average market capitalization of $72.5 billion. The top three sectors are technology, financials, and consumer services. Its top holdings are Microsoft, Apple, Amazon, Alphabet, and Facebook.

According to Vanguard, the fund's 10-year return is 13.4%, its 5-year return is 9.58%, and its year-to-date return is 21.1%.

The Vanguard Total Bond Market ETF (BND)

With $232 billion in assets under management, the Vanguard Total Bond Market ETF offers investors broad exposure to the fixed-income market. The expense ratio charged by Vanguard for this ETF is 0.035%.

The fund holds roughly 8,500 bonds in its portfolio: including 44% allocated to Treasury/agency bonds, 22% to government mortgage-backed bonds, and 16% to industrial bonds. The fund has returned 3.3% annually over the last five years and 3.8% over the last 10.

The Vanguard Growth ETF (VUG)

The Vanguard Growth ETF invests in stocks of large companies with high-growth potential and charges an expense ratio of 0.04%. The $92.5 billion in assets are weighted towards technology stocks. Apple, Amazon, Alphabet, Microsoft, and Facebook comprise the top five out of almost 300 holdings. The fund returned 14.85% annually over the last 10 years, 11.7% over the last five years, and 26% year-to-date.

The Vanguard Large-Cap ETF (VV)

The Vanguard Large-Cap ETF invests in stocks representing the largest 85% of the U.S. stock market, which ranges from larger multinational companies to midcap ones. The fund’s expense ratio is 0.04%.

The fund, which has $13 billion in assets, holds approximately 600 stocks in its portfolio, with an average market cap of $106 billion. Technology, financials, and consumer services represent the biggest sectors within the fund and the top five holdings include Microsoft, Apple, Amazon, Alphabet, and Facebook.

The fund's 10-year annual return is 13.4%, its five-year return is 10%, and the year-to-date the return equaled 21.1%.

The Vanguard Value ETF (VTV)

The Vanguard Value ETF invests in approximately 350 large-cap value stocks in the U.S. and comes with an expense ratio of 0.04% This ETF has $81.7 billion in AUM and holds 344 stocks from numerous industry groups: financials, healthcare, and consumer goods are the largest sectors. The average market cap of the companies in the ETF is $91.2 billion and the top five holdings are Berkshire Hathaway, Procter & Gamble, Johnson & Johnson, JPMorgan Chase, and Exxon Mobil.

Over the last 10 years, the returned 12.05% annually and over five years, 8.35%. Its year-to-date return was almost 17%.

The Vanguard Midcap ETF (VO)

The Vanguard Midcap ETF has an expense ratio of 0.04%, providing investors with low-cost access to a diversified group of medium-sized companies in the U.S. It has $107 billion AUM, which is invested in nearly 400 stocks that have a median market cap of $16 billion.

Financials account for 21% of the portfolio. Technology, consumer services, and industrials represent the next biggest sectors. The top five holdings are Twitter, Newmont Gold, Fiserv, Advanced Micro Devices, and Xilinx.

The fund's 10-year return is 14.1% and five-year return is 9.37%. It has returned 25.35% year-to-date.

The Vanguard Small-Cap ETF (VB)

The Vanguard Small-Cap ETF invests in a diversified group of small companies. The fund has an expense ratio of 0.05%. Assets under management total $94 billion and are invested in 1,400 stocks, with financials, industrials, and technology representing the biggest sectors. Burlington Stores, MarketAxess Holdings, STERIS plc, Atmos Energy, and IDEX Corp. are the top five holdings. Over the last 10 years, the ETF returned 12.7% annually and, over the last five, 7.2%. Its year-to-date return was 20.5%.

The Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)

With more than $77.7 billion in AUM and an expense ratio of 0.06%, the Vanguard Short-Term Inflation-Protected Securities ETF gives investors access to bonds backed by the federal government. It also aims to provide protection from inflationary risks or other unexpected inflationary surprises.

With $20 billion in assets, the fund is invested in just 17 government-backed bonds. Among the holdings, 42% are three to five-year bonds and one to three-year bonds comprise 41% of the portfolio. The remaining 17% consists of bonds with maturities of less than one year.

The fund, whose benchmark index is the BloomBarclays US 0-5 Year TIPS Index, returned 1% annually in five years and 3.5% year-to-date.

The Vanguard FTSE Developed Markets ETF (VEA)

With more than $110 billion in AUM, the Vanguard FTSE Developed Markets ETF has become a very popular low-cost way for investors to gain broad exposure to foreign developed economies and markets. The fund’s expense ratio is 0.05%.

The fund invests heavily in the European and Pacific markets and holds almost 4,000 stocks. The median market cap for the fund is $28.5 billion and the top five holdings are Royal Dutch Shell, Nestle, Samsung Electronics, Novartis, and Roche Holding. The fund returned 5.1% annually over the last 10 years and 2.1% over the last five years. Year-to-date, it is up 13.1%.

Sours: https://www.investopedia.com/articles/investing/040516/10-cheapest-vanguard-etfs-voo-vti.asp


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