Vanguard is well-known for running some of the largest and most prominent exchange-traded funds, or ETFs, on the market, but the asset management giant isn’t resting on its laurels.
Recently, Vanguard expanded its lineup yet again with the launch of two actively managed municipal bond ETFs: the Vanguard Core Tax-Exempt Bond ETF (ticker: VCRM) and the Vanguard Short Duration Tax-Exempt Bond ETF (VSDM). These funds aim to provide capital preservation and tax-efficient income with expense ratios competitive with many passively managed index ETFs.
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And Vanguard isn’t stopping there. The firm has disclosed plans to launch two new cash management strategies in the first quarter of 2025: the Vanguard Ultra-Short Treasury ETF (VGUS) and the Vanguard 0-3 Month Treasury Bill ETF (VBIL). These highly liquid ETFs are designed to act as a bridge between money market funds and ultra-short-term bond funds, with both boasting expense ratios as low as 0.07%, or $7 annually per $10,000 invested.
There’s no telling what the future holds for Vanguard’s ETF lineup, but if recent activity is any indication, investors can expect a continued focus on low-cost, fixed-income options and innovative active funds to complement its robust lineup of index-based passive ETFs.
“Overall, Vanguard is highly regarded among professional investors and financial experts, primarily due to its extensive array of offerings,” says Sean August, CEO of the August Wealth Management Group. “The company is renowned for cost-effectiveness, flexibility, transparency and a client-centric approach.”
Here are 10 of the best Vanguard ETFs to buy today:
| ETF | Expense ratio |
| Vanguard S&P 500 ETF (VOO) | 0.03% |
| Vanguard Total Stock Market ETF (VTI) | 0.03% |
| Vanguard Extended Market ETF (VXF) | 0.06% |
| Vanguard FTSE All-World ex-US ETF (VEU) | 0.07% |
| Vanguard Total World Stock ETF (VT) | 0.07% |
| Vanguard Total Bond Market ETF (BND) | 0.03% |
| Vanguard Total International Bond ETF (BNDX) | 0.07% |
| Vanguard Total World Bond ETF (BNDW) | 0.05% |
| Vanguard ESG U.S. Stock ETF (ESGV) | 0.09% |
| Vanguard Real Estate ETF (VNQ) | 0.13% |
Vanguard S&P 500 ETF (VOO)
“Benefits unique to ETFs include lower investment minimums, real-time pricing and tax efficiencies due to the creation process and the ability to defer capital gains,” says Lauren Wybar, senior wealth advisor at Vanguard. Thanks to a dual share class structure, many Vanguard mutual funds also come as ETFs.
For instance, investors who opt for VOO over its counterpart, the Vanguard 500 Index Fund Admiral Shares (VFIAX) enjoy a slightly lower 0.03% expense ratio (versus 0.04% for VFIAX). In addition, the minimum investment required for VOO is the price of a single share, at around $550, versus a required $3,000 minimum investment for VFIAX. In actuality, the cost to get exposure to VOO is much lower for anyone using a broker allowing fractional share investing, where you can purchase portions of stocks and ETFs for as little as $1.
Vanguard Total Stock Market ETF (VTI)
“ETFs are a good investment option as they offer diversification, low costs and the ability to trade shares during the trading day,” Wybar notes. The last feature isn’t found in mutual funds, which can only be purchased and sold once per day at market close. For trading flexibility, an ETF is better.
Investors who prefer the diversification of the Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) but want higher liquidity can opt for its ETF variant, VTI. For a 0.03% expense ratio, this ETF tracks more than 3,000 market-cap-weighted large-, mid- and small-cap stocks from all 11 stock market sectors.
Vanguard Extended Market ETF (VXF)
As market-capitalization-weighted index ETFs, both VOO and VTI naturally feature a high allocation to large-cap stocks. If you want to focus more on mid- and small-cap stocks, a dedicated non-core ETF like VXF might be ideal. This ETF tracks the S&P Completion Index for a 0.06% expense ratio.
VXF’s benchmark is designed to provide exposure to virtually all U.S. stocks minus the ones found in the S&P 500 index. As a result, investors can pair VXF with VOO in different proportions to slice-and-dice their U.S. equity allocation more finely. It is also available as an Admiral Shares mutual fund.
Vanguard FTSE All-World ex-US ETF (VEU)
The internationally diversified equivalent of VTI is VEU. This ETF tracks the FTSE All-World ex US Index, which holds more than 3,800 stocks from both international developed and emerging-market countries. This ETF is traded in U.S. dollars, allowing investors to gain international exposure easily.
The cost of trading international equities causes VEU to be pricier than a domestic equity ETF, but not by much. The fund charges a 0.07% expense ratio. It is also available as the Vanguard FTSE All-World ex-US Index Fund Admiral Shares (VFWAX).
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Vanguard Total World Stock ETF (VT)
Combining VTI and VEU grants investors a globally diversified stock portfolio, but decisions still have to be made around allocation proportions and rebalancing criteria. If you want to stay more hands-off, consider VT, which is Vanguard’s most diversified equity ETF. It charges a low 0.07% expense ratio.
VT tracks the FTSE Global All Cap Index, a benchmark designed to capture the world’s investable stock market. It features more than 9,800 market-cap-weighted stocks from all 11 sectors in the value and growth categories across U.S., international developed and emerging markets.
Vanguard Total Bond Market ETF (BND)
BND is the fixed-income equivalent of VTI. This ETF tracks the Bloomberg U.S. Aggregate Float Adjusted Index, which holds more than 11,300 government, mortgage-backed and investment-grade corporate bonds of multiple maturities. It is an easy way to lower portfolio risk and produce monthly income.
Right now, BND features an average 4.5% 30-day SEC yield, a standardized measure of its income potential. The ETF also has a duration of six years, implying moderate interest rate sensitivity. It is also extremely cost-effective, charging the same 0.03% expense ratio as VTI does.
Vanguard Total International Bond ETF (BNDX)
VTI has BND as a fixed-income counterpart, and naturally VEU has BNDX. This ETF tracks the Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index, which covers the investment-grade bond market in developed and emerging market countries. It charges a 0.07% expense ratio.
BNDX’s portfolio of bonds currently pays a 2.9% 30-day SEC yield with a duration of 7.2 years, making it slightly more sensitive to interest rate movements compared to BND. In addition, BNDX is hedged to mitigate volatility from fluctuations between the U.S. dollar and its foreign currency-denominated bonds.
Vanguard Total World Bond ETF (BNDW)
Combining BND and BNDX in equal proportions gets you BNDW. This Vanguard ETF uses a “fund of funds” structure to provide one-ticker exposure to the global bond market via an allocation of 50% in BND and 50% in BNDX. It has a 0.05% expense ratio, which includes all underlying ETF fees.
BNDW’s bond portfolio tracks the Bloomberg Global Aggregate Float Adjusted Composite Index, which is heavily diversified with over 18,000 investment-grade issues. Currently, investors can expect a 4.2% 30-day SEC yield and a 6.5-year average duration, again implying moderate interest rate sensitivity.
Vanguard ESG U.S. Stock ETF (ESGV)
Vanguard’s ETF lineup also has some specialty products designed to cater to investors with non-pecuniary objectives. A great example is ESGV, which tracks an environmental, social and governance (ESG)-focused benchmark via the FTSE US All Cap Choice Index for a 0.09% expense ratio.
ESGV’s portfolio holds 1,385 market-cap-weighted stocks screened for ESG compliance. Broadly, this involves excluding industries like nuclear power, defense, oil and gas, adult entertainment, alcohol, tobacco, gambling, civilian firearms, and cannabis.
Vanguard Real Estate ETF (VNQ)
Vanguard’s specialty fund lineup also includes ETFs designed to track all 11 stock market sectors. These include communication services, consumer discretionary, consumer staples, energy, financials, health care, industrials, information technology, materials, real estate and utilities.
For example, an investor looking to overweight real estate sector stocks can use VNQ. This ETF tracks the MSCI US Investable Market Real Estate 25/50 Index for a 0.13% expense ratio and is largely composed of real estate investment trusts (REITs), which have the potential to pay above-average income.
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10 of the Best Vanguard ETFs to Buy for 2025 originally appeared on usnews.com
Update 11/26/24: This story was previously published at an earlier date and has been updated with new information.
