10 Best Vanguard ETFs for 2023
When it comes to choosing the best Vanguard exchange-traded funds, investors have 81 options they can select. This can make the choice seem overwhelming. But if you understand what to look for in an ETF, you can narrow down your choices and pick the best.
See: 3 Things You Must Do When Your Savings Reach $50,000
Diversifying your portfolio is key, and ETFs already provide a diversified option. By adding several of the following funds to your portfolio, you can create an investment account that will meet or exceed average returns.
What Are the Best Vanguard ETFs?
The best Vanguard ETF for you depends on your investment strategy, your areas of interest and the other products in your portfolio. Here’s a look at 10 picks to consider.
Best for Risk-Averse Investors: Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)
With an affordable price below $50 per share and a super-low expense ratio of 0.04%, the Vanguard Short-Term Inflation-Protected Securities ETF is a great place to park your money to hedge against high inflation. It tracks the performance of inflation-protected public obligations of the U.S. Treasury. The interest and principal are adjusted for inflation. Morningstar gives it a rating of 5 stars in the category of inflation-protected bond funds.
Best for S&P 500 Investments: Vanguard S&P 500 ETF (VOO)
Investors look to the S&P 500 for blue-chip stock picks that provide high growth in the long term. The Vanguard S&P 500 ETF tracks the S&P 500. Representing 500 of the largest companies in the U.S., the index typically reflects the overall growth of the U.S. stock market in general. The fund has been around since 2010 and offers returns over 7% in 2023 and a low expense ratio of 0.03%.
Best for REIT Investments: Vanguard Real Estate ETF (VNQ)
Real estate investment trusts are a good way to invest in real estate with none of the time investment or risks inherent in managing a property. With a price just under $100 per share, the Vanguard Real Estate ETF represents a good way to diversify your portfolio and get into commercial real estate investment without buying office buildings, hotels or other CRE properties. The ETF tracks the return of the MSCI US Investable Market Real Estate 25/50 Index, made up of stocks issued by REITs in the U.S.
Best Diversified ETF: Vanguard Total Stock Market ETF (VTI)
The Vanguard Total Stock Market ETF tracks the performance of the overall U.S. stock market. A large-blend ETF, it currently offers returns over 8%, making it one of the best-performing stocks on this list. It is also available as an Admiral Shares mutual fund, with a minimum investment of $3,000.
Best for Internationally Focused Investors: Vanguard Total International Stock ETF (VXUS)
If you’re looking to diversify your portfolio with a large basket of international stocks, consider the Vanguard Total International Stock ETF. The ETF tracks the performance of the FTSE Global All Cap ex US Index, giving you exposure to developed and emerging non-U.S. markets. With returns over 7% and a dividend yield of 3.13% for just over $55 per share, this is a great value ETF for international exposure.
Best for High 10-Year Returns: Vanguard Information Technology ETF (VGT)
The Vanguard Information Technology ETF is a high-growth ETF with potential for high long-term returns. It is offering high returns over 14% in 2023, with a price of roughly $365 per share as of Feb. 9. It is passively managed and tracks the performance of a benchmark index representing stocks in the IT sector.
Best Bond ETF: Vanguard Total Bond Market ETF (BND)
Bonds tend to be a stable investment, and the Vanguard Total Bond Market ETF is rated a 2 out of 5 on the scale of risk to reward, making it a good investment for those who do not have high risk tolerance or are closer to retirement. With a low expense ratio of 0.03% and a price under $75 per share as of Feb. 9, Vanguard says the ETF has a “relatively high potential for investment income.”
Best for Income Investors: Vanguard Emerging Markets Government Bond ETF (VWOB)
If you’re seeking a stable fund to provide retirement income, the Vanguard Emerging Markets Government Bond ETF is a passively managed fund that tracks the performance of the Bloomberg USD Emerging Markets Government RIC Capped Index. With a 30-day SEC yield of 6.55%, returns around 3% and an expense ratio of 0.20%, it has been rated as best for investors seeking stable income from their portfolio.
Best ESG ETF: Vanguard ESG US Stock ETF (ESGV)
Many people today seek investments that align with their values. ESG stocks allow you to support companies with exceptional morals when it comes to environmental, social and governance factors. The Vanguard ESG U.S. Stock ETF tracks the performance of U.S. companies with a focus on ESG factors, represented on the FTSE US All Cap Choice Index. The fund includes large-, mid- and small-cap domestic stocks and offers high returns over 9.5%.
Overall Best-Performing Vanguard ETF: Vanguard Energy ETF (VDE)
Perhaps not surprisingly given current energy prices in the U.S., the Vanguard Energy ETF has performed very well in recent months. It has become widely regarded as Vanguard’s best-performing ETF in 2023, with a return of 47.95% in the last trailing year, according to ETF.com.
Final Take
Experts recommend ETFs as an easy way to build a diversified portfolio. You can get started by opening a Vanguard account and making your first investment for just $1.
As always, GOBankingRates’ picks do not represent investment advice, and you should speak to a financial planner to create an investment portfolio that matches your needs and risk tolerance.
FAQ
- What is Vanguard's best-performing ETF?
- Research shows that Vanguard's best-performing ETF in the past year is the Vanguard Energy ETF.
- Is a Vanguard ETF a good investment?
- Vanguard ETFs represent a good investment, especially for investors who are seeking to build a diversified portfolio and do not want to actively manage it. Vanguard ETFs track some of the best-performing and most well-known stocks and bonds across a variety of sectors, including energy, technology, healthcare and the S&P 500.
- With a low cost of entry, Vanguard ETFs are accessible to beginning investors and high-net-worth individuals alike. You can purchase ETF shares with as little as a $1 minimum investment.
- What are the top five ETFs to buy?
- Vanguard offers 81 ETFs covering domestic and international stocks and bonds. Many of the firm's ETFs are amongst the top investments you can make. Here are the top five Vanguard ETFs:
- — Vanguard Energy ETF
- — Vanguard ESG U.S. Stock ETF
- — Vanguard Total Stock Market ETF
- — Vanguard Information Technology ETF
- — Vanguard S&P 500 ETF
- Some investors may prefer other ETFs offered by Vanguard, depending on their risk tolerance and investment strategy.
- Vanguard offers 81 ETFs covering domestic and international stocks and bonds. Many of the firm's ETFs are amongst the top investments you can make. Here are the top five Vanguard ETFs:
Data is accurate as of Feb. 9, 2023, and is subject to change.
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