Vanguard is one of the largest, most popular financial firms in the world. They are the pioneers of index funds and ETFs. Thanks to Jack Bogle and Vanguard, it's much cheaper for investors to invest than ever before. Let's review the most popular Vanguard ETFs and funds.
Vanguard has probably saved investors more money than any other financial institution in the world. With passive index investing, millions of Americans have gotten richer because of Vanguard.
Despite having trillions in assets under management, Jack Bogle is no billionaire because he passed on most of the cost savings to the investor.
Let's take a look at the most popular Vanguard ETFs today.
Most Popular Vanguard ETFs And Funds
Here's a snapshot of some of the most popular Vanguard ETFs with their ticker symbols, expense ratios, and Morningstar ratings. Morningstar is a fund rating service. Notice how all funds have an expense ratio of below 0.2%, unlike many active fund with expense ratios of 1% or higher.
| Fund | Ticker | Expense Ratio | Morningstar Rating |
|---|---|---|---|
| 1. Total Stock Market ETF | VTI | 0.04% | ⭐⭐⭐⭐ |
| 2. Total International Stock ETF | VXUS | 0.11% | ⭐⭐⭐ |
| 3. S&P 500 ETF | VOO | 0.04% | ⭐⭐⭐⭐⭐ |
| 4. Target Retirement 2050 | VFIFX | 0.16% | ⭐⭐⭐⭐ |
| 5. REIT ETF | VNQ | 0.12% | ⭐⭐⭐ |
| 6. Total Bond ETF | BND | 0.05% | ⭐⭐⭐ |
| 7. Wellington | VWELX | 0.25%/0.16% | ⭐⭐⭐⭐⭐ |
| 8. High-Yield Tax-Exempt Fund | VWAHX | 0.19%/0.09% | ⭐⭐⭐⭐⭐ |
| 9. STAR Fund | VGSTX | 0.32% | ⭐⭐⭐⭐ |
| 10. Windsor Fund | VWNDX | 0.30%/0.20% | ⭐⭐⭐⭐ |
Vanguard Total Stock Market ETF (VTI)
Quick Fund Stats:
- Ticker: VTI
- Expense Ratio: 0.04%
- Asset Class: Domestic Stock – General
- Category: Large Blend
- Minimum Investment: No Minimum
The Vanguard Total Stock Market is the entire market including large, mid and small-cap companies in the United States. With an expense ratio of only 0.04%, it is one of the lowest in the industry.
Vanguard Total International Stock ETF (VXUS)
Quick Fund Stats:
- Ticker: VXUS
- Expense Ratio: 0.11%
- Asset Class: International/Global Stock
- Category: Foreign Large Blend
- Minimum Investment: No Minimum
VTI tracks the FTSE Global All Cap ex US Index, which includes all publicly traded companies located outside the United States. The expense ratio of 0.11% is extremely low too. Consider VXUS as a core part of your international diversification strategy.
Vanguard S&P 500 ETF (VOO)
Quick Fund Stats:
- Ticker: VOO
- Expense Ratio: 0.04%
- Asset Class: Domestic Stock – General
- Category: Large Blend
- Minimum Investment: No Minimum
The Vanguard S&P 500 ETF is an index fund that mirrors the S&P 500 index. With a 0.04% expense ratio, it's one of the cheapest S&P 500 index funds. Other popular competitors include SPY and IVV.
Vanguard Target Retirement 2050 Fund (VFIFX)
Quick Fund Stats:
- Ticker: VFIFX
- Expense Ratio: 0.16%
- Asset Class: Life-Cycle
- Category: Target-Date 2046-2050
- Minimum Investment: $1,000
Target date retirement funds are popular because they adjust the ratio between stocks and bonds automatically for you. The closer you are to retirement, the more conservative the allocation. We have a target date fund for my son's 529 plan for when he goes to college in 2036.
The expense ratio of VFIX of 0.16% (as of January 2020) is quite modest.
The 2050 target fund invests in other Vanguard funds:
- Vanguard Total Stock Market Index Fund (Investor Shares) – 54.1%
- Vanguard Total International Stock Index Fund (Investor Shares) – 35.9%
- Vanguard Total Bond Market II Index Fund (Investor Shares) – 7.1%
- Vanguard Total International Bond Index Fund (Investor Shares) – 2.9%
The minimum investment in the target funds is just $1,000 – compared to $3,000 for most other mutual funds at Vanguard.
Vanguard REIT ETF (VNQ)
Quick Fund Stats:
- Ticker: VNQ
- Expense Ratio: 0.12%
- Asset Class: Stock – Sector-Specific
- Category: Real Estate
- Minimum Investment: No Minimum
REITs have been the best performing asset class over a 20-year period. Bet you didn't know this! In addition to REITs, investors should consider real estate crowdfunding to be more surgical with their real estate investments.
VNQ has an expense ratio of 0.12% and holds some of the largest REITs in the country.
Vanguard Total Bond ETF (BND)
Quick Fund Stats:
- Ticker: BND
- Expense Ratio: 0.05%
- Asset Class: Intermediate-Term Bond
- Category: Intermediate-Term Bond
- Minimum Investment: No Minimum
The Total Bond ETF holds U.S. investment grade bonds with an average effective maturity of 8.4 years. BND gives you exposure to the total aggregate bond market, which generally returns 3% – 5% a year with much less volatility than stocks.
Related: The Case For Bonds: Living For Free And Other Benefits
Vanguard Wellington Fund (VWELX)
Quick Fund Stats:
- Ticker: VWELX
- Expense Ratio: 0.25% Investor, 0.17% Admiral
- Asset Class: Balanced
- Category: Moderate Allocation
- Minimum Investment: $3,000 ($50,000 for Admiral)
VWELX has a 0.25% expense ratio for the Investor Shares and 0.16% for the Admiral Shares (with a $50,000 minimum).
VWELX has an asset allocation of: two-thirds stocks and one-third bonds.
Vanguard High-Yield Tax-Exempt Fund Admiral Shares (VWAHX)
Quick Fund Stats:
- Ticker: VWAHX
- Expense Ratio: 0.17% Investor, 0.09% Admiral
- Asset Class: Long-Term Bond
- Category: High Yield Muni
- Minimum Investment: $3,000 ($50,000 for Admiral)
If you are in a high income tax bracket, you want to earn tax-free income in munis. I have a huge percentage of my assets in CA munis earning 3-4% interest plus principal appreciation if any.
The bulk of the credit quality is AA (17.7%), A (36.6%) and BBB (25.3%) with maturities in the 5-10 Years (10.2%), 10-20 Years (34.5%) and 20-30 Years (35.6%) range. So it's going to be impacted by interest rates pretty significantly. Average stated maturity is 17.6%.
Vanguard STAR (VGSTX)
Quick Fund Stats:
- Ticker: VGSTX
- Expense Ratio: 0.31% Investor
- Asset Class: Balanced
- Category: Moderate Allocation
- Minimum Investment: $1,000
The Vanguard STAR Fund has a $1,000 minimum and a higher 0.32% expense ratio because it offers a mix of Vanguard funds. It's a fund of funds.
Here are the underlying funds as 2020 (all Investor Shares):
- Vanguard Windsor II Fund – 14.1%
- Vanguard Long-Term Investment-Grade Fund – 12.3%
- Vanguard GNMA Fund – 12.3%
- Vanguard Short-Term Investment-Grade Fund – 12.3%
- Vanguard International Value Fund – 9.5%
- Vanguard International Growth Fund – 9.4%
- Vanguard Windsor Fund – 7.8%
- Vanguard PRIMECAP Fund – 6.2%
- Vanguard U.S. Growth Fund – 6.1%
- Vanguard Morgan Growth Fund – 6.1%
- Vanguard Explorer Fund – 3.9%
Vanguard Windsor Fund (VWNDX)
Quick Fund Stats:
- Ticker: VWNDX
- Expense Ratio: 0.31% Investor, 0.21% Admiral
- Asset Class: Domestic Stock – General
- Category: Large Value
- Minimum Investment: $3,000 ($50,000 for Admiral)
The Windsor Fund is a large cap, actively managed fund with a 0.31% expense ratio. High, but not bad compared to 1% for other active fund competitors. It started in 1958 and has returned roughly 11.5% a year since.
General Vanguard ETF Minimums
You can invest as little as you want in a Vanguard ETF. However, there is usually a $1,000 minimum amount you need for Vanguard's Target Retirement Funds and their Vanguard STAR Fund.
All Vanguard funds have some of the lowest fees in its class. Low fees are what make Vanguard funds so special and attractive to investors. I would never pay more than 0.35% in fees for a fund because you simply don't have to. There are better alternatives with fees that are less.
Check out the chart below that shows the difference in your fund's balance after 30 years between a 0.25% fee and a 0.90% fee. We're talking a $94,000 difference!
Vanguard ETFs Or Vanguard Mutual Funds
When you buy and sell (redeem) a mutual fund, you deal directly with the fund itself. When you buy and sell shares of an ETF, you're doing so on the open market.
Functionally, the biggest difference is that an ETF can be bought and sold when the market is open, because it's traded just like a stock. A mutual fund is transacted just once a day when the market closes.
The expense ratios are similar between Vanguard funds and Vanguard ETFs. Vanguard funds have two classes – Investor and Admiral shares. The Admiral shares have a lower fee but require a higher minimum investment, usually $10,00 or $50,000.
The ETF expense ratio mirrors the Admiral shares but has no minimum investment.
Here's a comparison of expense ratios for the Vanguard Total Stock Market Fund/ETF:
- Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) – 0.04%, $10,000 minimum
- Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) – 0.15%, $3,000 minimum
- Vanguard Total Stock Market ETF (VTI) = 0.04%, no minimum
Transaction fees waived in a Vanguard account: When you buy and sell shares of an ETF, you pay a transaction fee just as you would any other stock. If you buy and sell shares of Vanguard ETFs within your Vanguard brokerage account or most other online brokerages nowadays, you do not pay a fee.
Owning a Vanguard ETF is easier and cheaper.
Vanguard Admiral Funds
Vanguard mutual funds have two classes – Investor Shares (regular) and Admiral Shares. Investor Shares usually have minimum investments of $3,000 whereas Admiral Shares have higher minimums of $10,000. The Admiral Shares also come with a lower expense ratio, usually matching the expense ratio of the corresponding ETF.
For example, Vanguard 500 Index Fund Investor Shares (VFINX) has a $3,000 minimum and a 0.14% expense ratio.
Vanguard 500 Index Fund Admiral Shares (VFIAX) has a $10,000 minimum and a 0.04% expense ratio. You can start with Investor Shares and when the balance exceeds $10,000, request they be converted to Admiral shares (it is a non-taxable event).
Related Post: An Easy Guide To DIY Investing
Invest Wisely And Regularly
Investing has inherent risk. You can and will lose money. Make sure you have a proper asset allocation and invest for the long term.
Also consider investing in real estate to diversify your wealth beyond stocks and bonds. Real estate is my favorite asset class to build wealth because it is tangible, produces income, and is less volatile. I'm currently investing in real estate crowdfunding in the heartland of America. Post-pandemic, there should be permanent demographic shifts to lower-cost areas of the country.
My favorite platforms are Fundrise and CrowdStreet. They have the best platforms with the most rigorous vetting process among all real estate crowdfunding platforms. Both are free to sign up and explore.
I've personally invested $810,000 in real estate crowdfunding to diversify my wealth. In addition, I own VNQ, one of the most popular Vanguard ETFs as well. VNQ is a real estate fund.
