As one of the world’s largest asset managers, Vanguard devotes significant resources to investor education. A key example of this commitment is “Vanguard’s Principles for Investing Success,” a set of four core guidelines that shape how the firm believes investors should approach markets.
The first principle is “Goals,” which encourages investors to create clear and appropriate investment objectives. This means aligning investments with a specific time frame and purpose, such as avoiding equity funds when saving for a near-term home purchase. It also reminds investors that returns alone may not be enough, and consistent saving plays just as important a role in reaching financial goals.
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Next is “Balance,” which speaks to the structure of a portfolio. Vanguard recommends broad diversification across both stocks and bonds and spreading that exposure geographically and across sectors. However, diversification alone isn’t enough for success.
That leads to the third principle: “Cost.” Vanguard emphasizes keeping costs low, both in terms of explicit expenses like fund fees and brokerage commissions, and implicit ones like taxes from frequent trading or excessive distributions. Reducing these drags can meaningfully improve long-term returns.
Finally, the fourth principle, “Discipline,” ties everything together. Vanguard encourages investors to stay the course through volatility, avoid emotional reactions and stick to predetermined plans for things like rebalancing and adding new money. Avoiding panic selling and market timing can be just as important as what you choose to invest in.
If you’re picking from one of Vanguard’s 358 funds for a buy-and-hold portfolio, keeping these four principles in mind can go a long way toward helping you succeed as a long-term investor.
Here’s a look at seven of the best Vanguard funds to buy and hold:
| Fund | Expense ratio |
| Vanguard 500 Index Fund Admiral Shares (ticker:VFIAX) | 0.04% |
| Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) | 0.04% |
| Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) | 0.09% |
| Vanguard Total World Stock Index Fund Admiral Shares (VTWAX) | 0.09% |
| Vanguard Wellington Fund Investor Shares (VWELX) | 0.25% |
| Vanguard Wellesley Income Fund Investor Shares (VWINX) | 0.23% |
| Vanguard Target Retirement 2070 Fund (VSVNX) | 0.08% |
Vanguard 500 Index Fund Admiral Shares (VFIAX)
“The S&P 500 index should be a staple of every investor’s portfolio,” says Henry Yoshida, senior vice president of Retired.com. According to the S&P Indices Versus Active (SPIVA) study, over the past 15 years, 89.5% of all large-cap U.S. equity funds underperformed the S&P 500. For direct exposure to this index, Vanguard offers VFIAX at a 0.04% expense ratio with a $3,000 minimum required investment.
VFIAX fully replicates the S&P 500, meaning it holds every stock in the index in the correct weight. Vanguard’s long experience with index funds means the tracking error for VFIAX has been extremely low over the past decade. In other words, its long-term performance has closely matched the index with minimal deviation. Over the past 10 years, VFIAX has delivered a 12.3% annualized return.
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
Even broader benchmarks like the CRSP U.S. Total Market Index, which spans more than 3,500 small-, mid- and large-cap U.S. stocks can be tracked efficiently. VTSAX achieves this by sampling, which means it selects a representative subset of stocks rather than holding every single one. This is often used when full replication would be too costly or complex. The fund charges the same 0.04% expense ratio as VFIAX.
“VTSAX gives you complete exposure to the entire U.S. stock market, from the ‘Magnificent Seven‘ down to thousands of publicly traded small- and mid-cap stocks that could become the next Nvidia Corp. (NVDA) of the future,” Yoshida says. “Personally, it represents the majority of my personal investment portfolio since it is so diversified, low-cost and tax efficient — you can buy this fund and hold it forever.”
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)
VTSAX gives you exposure to the investable U.S. market, but it’s still limited to one country. For full diversification in line with what Vanguard recommends, you’ll need international stocks. The fund for that role is VTIAX, which tracks the FTSE Global All Cap ex U.S. Index. The result is a portfolio of more than 8,600 market-cap-weighted stocks from both developed and emerging markets.
Examples of developed markets include Japan, the U.K., Canada and Germany, while emerging markets span countries like China, India and Brazil. International funds tend to be more expensive, and VTIAX charges a 0.09% expense ratio, but that remains reasonable given the breadth of exposure. Year to date, VTIAX is outperforming VTSAX thanks to a rotation into European equities.
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Vanguard Total World Stock Index Fund Admiral Shares (VTWAX)
Vanguard’s most diversified equity fund is arguably VTWAX, which essentially combines what you’d get from owning both VTSAX and VTIAX — but all in one ticker. It tracks the FTSE Global All Cap Index, holding more than 9,700 small-, mid- and large-cap stocks across all 11 sectors and spanning the U.S., developed and emerging markets. All this comes at a reasonable 0.09% expense ratio.
Right now, the portfolio for VTWAX breaks down to approximately 63% U.S., 27% developed international and 10% emerging markets. This allocation isn’t fixed. It simply reflects the relative market capitalizations of each country. Thanks to a decade of U.S. outperformance, the current weight skews heavily toward domestic stocks, but that could shift meaningfully in the future.
Vanguard Wellington Fund Investor Shares (VWELX)
“Launched in 1929, VWELX has seen it all: the Great Depression, World War II, the intense bear market of the 1970s, the subsequent bull market of the ’80s and ’90s, the global financial crisis, and the COVID-19 pandemic, just to name a few,” says Brian Miller, senior investment specialist on the multi-asset solutions team at Vanguard. Unlike the previous Vanguard funds, VWELX does not track an index.
This fund is actively managed. It allocates roughly two-thirds to high-quality large- and mid-cap stocks, with a focus on out-of-favor industries. A valuation and dividend yield screen helps guide stock selection. The remaining third is invested in intermediate-duration investment-grade bonds. Despite being actively managed, VWELX maintains a competitive 0.25% expense ratio.
Vanguard Wellesley Income Fund Investor Shares (VWINX)
VWINX is the more conservative, income-oriented counterpart to VWELX. While not as old, it still boasts a long track record dating back to 1970. Unlike Wellington, which leans more toward equities, VWINX flips the script with about two-thirds of the portfolio in bonds and one-third in stocks. The equity sleeve typically holds fewer than 100 names, selected for value, dividend yield and dividend growth.
The fund is primarily designed to generate consistent income for investors with lower risk tolerance and shorter time horizons, often retirees drawing from their portfolios. Currently, VWINX yields 3.9% on a 30-day SEC basis, putting it in the ballpark of the “4% rule,” a retirement planning guideline that suggests withdrawing 4% of your portfolio per year, adjusted for inflation to avoid running out of money.
Vanguard Target Retirement 2070 Fund (VSVNX)
“Vanguard’s suite of target retirement funds can be a complete portfolio solution for investors who want a simple, globally diversified portfolio that adjusts its risk profile over time,” Miller says. “Simply pick the target date closest to when you plan to retire, and the fund allocates your assets to a low-cost mix of stocks and bonds that gradually gets more conservative as you approach retirement.”
For example, investors planning to retire around 2070 should consider selecting VSVNX in their 401(k) plan if available. The fund currently holds 90% global stocks and 10% bonds, prioritizing growth since younger investors have time to ride out market volatility. As the target date approaches, VSVNX will gradually increase bond holdings to help preserve capital in the years leading up to and into retirement.
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7 Best Vanguard Funds to Buy and Hold originally appeared on usnews.com
Update 05/06/25: This story was previously published at an earlier date and has been updated with new information.
