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 US 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 US 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 US stocks, and the US 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 gives you 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 US bond market, including both government bonds and corporate bonds. Alongside VTI and VXUS, BND rounds out the popular Boglehead’s 3 Fund Portfolio.
BND seeks to track the Bloomberg US 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
Finally, 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.
Interested in more Lazy Portfolios? See the full list here.
Disclaimer: While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational 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. Do your own due diligence. Past performance does not guarantee future returns. Read my longer disclaimer here.