15 Best Vanguard Mutual Funds for Investors of All Stripes
The best Vanguard mutual funds might cover a wide assortment of investing strategies, but they have two things in common: simplicity and cheap fees.
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.
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.
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).
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).
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).
Vanguard International Explorer Fund
- 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.
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.
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.
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).
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).
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.
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.
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).
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).
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).
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.
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.
