Vanguard provides some of the most popular, lowest cost ETFs out there. Here we'll look at the best Vanguard ETFs for 2023.
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In a hurry? Here’s the list:
- VOO – Vanguard S&P 500 ETF
- VTI – Vanguard Total Stock Market ETF
- VXUS – Vanguard Total International Stock ETF
- VT – Vanguard Total World Stock ETF
- BND – Vanguard Total Bond Market ETF
- BNDX – Vanguard Total International Bond ETF
- BNDW – Vanguard Total World Bond ETF
Introduction – Vanguard ETFs
Vanguard is a shareholder-owned asset management firm that was founded in 1975 by Jack Bogle. The firm boasts over $7 billion in assets.
Vanguard is committed to low-fee investing and providing value to clients. The company is best known for its low-cost index ETFs and mutual funds, which are some of the most popular investment products available, making Vanguard the go-to provider for individual investors, financial advisors, and institutions.
Below are some of the best Vanguard ETFs for 2023 for the low-fee index investor.
VOO – Vanguard S&P 500 ETF
VOO is Vanguard's ETF to track the famous S&P 500 Index, comprised of the 500 largest profitable publicly traded companies in the United States. The S&P 500 index is a proxy for what we call “the market.”
This ETF gets you well-diversified across U.S. large-cap stocks. These are household names like Johnson & Johnson, Microsoft, and Coca-Cola.
VOO has an expense ratio of 0.03%.
VTI – Vanguard Total Stock Market ETF
VTI goes a bit further than VOO and adds in smaller companies that we refer to as small-caps and mid-caps. At market cap weights, these smaller companies comprise a little less than 20% of the entire investable U.S. stock market. That is, roughly 80% of VTI is VOO.
In that sense, we'd say VTI is more diversified with about 3,500 stocks via the CRSP US Total Market Index. VTI is a major component in many lazy portfolios.
VTI has a fee of 0.03%.
VXUS – Vanguard Total International Stock ETF
VOO and VTI only cover U.S. stocks, and the U.S. is one single country out of nearly 200 in the world. VXUS provides exposure to global stocks outside the United States, which we call the total international stock market.
Doing so enhances the portfolio's diversification, meaning a lower risk profile. This ETF gets you to exposure to companies like Nestle, Samsung, and Toyota.
VXUS seeks to track the FTSE Global All Cap ex US Index and has nearly 8,000 holdings and has an expense ratio of 0.07%.
VT – Vanguard Total World Stock ETF
We can go one step further and simply combine the previous two funds to capture the entire global stock market via Vanguard’s Total World Stock ETF, which gets you fully diversified globally in stocks in one fell swoop. You can brag to your friends that you own over 9,000 stocks in your portfolio.
VT seeks to track the FTSE Global All Cap Index and has a fee of 0.07%.
BND – Vanguard Total Bond Market ETF
Keep in mind that stocks are only one asset class. Bonds, also called fixed income, are typically the first diversifier of choice to diversify across asset types.
BND allows investors to capture the total U.S. bond market, including both government bonds and corporate bonds. Alongside VTI and VXUS, BND rounds out the popular Bogleheads 3 Fund Portfolio.
BND seeks to track the Bloomberg U.S. Aggregate Float Adjusted Index and has an expense ratio of 0.03%.
BNDX – Vanguard Total International Bond ETF
Vanguard also has a total international bond market fund, which is BNDX.
BNDX seeks to track the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index and has an expense ratio of 0.07%.
BNDW – Vanguard Total World Bond ETF
Lastly, just like we did earlier with stocks, for the investor who wants to simplify and use a single fund for a global scope, BNDW is the total world bond market.
BNDW seeks to track the Bloomberg Global Aggregate Float Adjusted Composite Index and has an expense ratio of 0.06%.
Where to Buy These Vanguard ETFs
You don't need an account at Vanguard to buy their products. Conveniently, all these Vanguard ETFs should be available at any major broker.
My choice is M1 Finance. It has zero transaction fees and offers fractional shares, dynamic rebalancing, and a modern, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.
Disclosures: I am long VOO in my own portfolio.
Disclaimer: While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.
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