10 Best Vanguard ETFs Of March 2024 (2024)

The Vanguard S&P 500 ETF offers investors a great way to get exposure to a key broad market benchmark, and it does so at a notably low cost. Another plus: The fund’s dividend yield is a proxy for the overall stock market’s yield. If you’re aiming for better cash flow than the market, VOO is what you’ve got to beat.

VOO holds stocks in the same proportions as itself. Each position is based on a stock’s market-capitalization weighting in the benchmark. Thanks to its low expense ratio, VOO’s performance is just fractions behind the market. Better yet, VOO has actually outperformed its Morningstar large-cap blend category over the past one-, three-, five- and 10-year periods.

If you’re looking for a core holding that gives you more income than the S&P 500, check out the Vanguard Dividend Appreciation ETF. This fund tracks an index populated by stocks of companies that have a record of increasing dividends annually for at least 10 years in a row. As a result, VIG’s dividend yield is roughly 30% more generous than the overall market’s, measured by VOO.

Dividend payers tend to be high-quality companies with promising outlooks. Their solid fundamentals make them less volatile than lower-quality stocks. Managers pick companies with a record of growing their dividends, making VIG somewhat concentrated. Its more than 300 holdings are focused in the tech, financials, healthcare, consumer discretionary and communication services sectors.

VIG’s top holdings include some of the most prominent U.S. companies such as Microsoft (MSFT), Apple (AAPL), Exxon Mobil (XOM), UnitedHealth Group (UNH) and Johnson & Johnson (JNJ). That household-name approach makes the fund more conservative and less volatile than more aggressive strategies typically are.

The Vanguard FTSE All-World ex-US ETF owns international stocks that are headquartered outside the U.S.

Should you abstain from owning VEU because foreign stocks’ performance has generally lagged that of U.S. stocks over the past decade or so? Not necessarily. Ignoring international business can make you miss out on some great investment opportunities—not to mention the typically more generous dividends U.S. market.

VEU owns about 3,600 growth, value and blend foreign stocks. Holdings skew toward large caps. VEU’s largest sectors are financials, industrials, technology and consumer cyclicals. Investors seeking one fund to cover their foreign stock allocation with good cash flow and share-price appreciation potential can find what they’re seeking in VEU.

A fixed-income fund like the Vanguard Intermediate-Term Bond ETF provides both stability and income. That second element is especially true at the moment. The fund’s dividend yield—roughly double the broad U.S. stock market’s as measured by VOO, a proxy for the S&P 500 Index—is based on income distributions over the past 12 months. But feel free to lick your chops when you see that BIV’s SEC yield is more than 4%. That yield is based on net investment income received during the 30 days through the end of the prior month. That means that BIV’s dividend yield has been rising.

While bonds add stability and cash flow to an otherwise risky all-equity portfolio, what about BIV’s total return? It’s OK. It topped its Morningstar intermediate core bond fund category’s average annual returns over the past one, five, 10 and 15 years.

As interest rates stabilize, bonds yields are likely to stay put. That should reward patient investors in funds like BIV with greater income generation. If interest rates reverse course and decline, investors can enjoy capital appreciation.

The popularity of environmental, social and governance strategies—commonly referred to as ESG investing —is growing as more investors seek to align their portfolios with their values. The Vanguard ESG U.S. Stock ETF delivers U.S. all-cap exposure to companies that meet human rights, fair labor, environmental, and anti-corruption principles outlined in the UN Global Compact.

ESGV abstains from investments in certain stocks that are involved with adult entertainment, alcohol, tobacco, gambling, chemical and biological weapons, firearms, coal, oil and gas. And it delivers on its mission at a very low cost.

The fund’s roughly 1,500 companies—almost all based in the U.S.—are mainly large-cap stocks with a growth or blend orientation. The fund sports a decent projected three-to-five-year average annual earnings growth rate around 11%. And it’s more than one full percentage point better than ESGV’s Morningstar category’s average. Roughly one-third of the fund’s holdings are in the technology sector. Its next largest sectors are healthcare, financials and consumer discretionary stocks.

The Vanguard Health Care ETF owns about 400 stocks of companies in the medical and healthcare products, services, technology and equipment sectors. VHT’s projected average annual three-to-five-year earnings growth rate beats its Morningstar category’s average. Its top-10 holdings are mainly well known health-care companies. They make up nearly 50% of the fund.

The growing ranks of older Americans are a key tailwind for Vanguard Health Care ETF.By the year 2040, about one in five Americans will be age 65 or older. That will be a big increase from the relative size of that age group—about one in eight—in 2000, according to the Urban Institute.

The Vanguard Growth ETF offers growth investors cheap access to about 240 U.S. large-cap growth stocks. More than 40% of the portfolio consists of technology stocks. Consumer cyclicals are the fund’s next largest sector, followed by the consumer discretionary and telecom sectors.

One drawback: VUG is volatile. And it’s hard for the highest return strategies to keep outperforming. But this fund is no flash in the pan. Its average annual return over the past one, three, five, 10 and 15 years topped the fund’s large-cap growth Morningstar peer group average.

VUG is a sound Vanguard ETF to add to a diversified portfolio for investors seeking to up their bets on top tech and consumer discretionary companies.

The Vanguard Small-Cap Value ETF owns attractively valued, U.S. small-cap companies. With roughly 850 holdings, the fund is well diversified. The fund has roughly 6% of its shareholders’ money at work in its top-10 holdings. VBR has outperformed its Morningstar small-cap value category over the past one, three, five, 10 and 15 years, but it has lagged the overall market in the form of the S&P 500.

Still, VBR’s dividend yield beats the overall market’s average. And historically, the small cap value strategy has outperformed despite recent underperformance versus large-cap growth, for instance. Another plus: VBR’s low price-earnings ratio of about 11 means that investors are paying about one dollar for $11 of earnings. Contrast that with the frothy P/E ratio of around 21 for VOO, the S&P 500 proxy ETF.

The Vanguard FTSE Pacific ETF is a way to dive into companies based around the Pacific rim. The fund owns about 2,500 stocks in companies located in Japan, Australia, Hong Kong, New Zealand and Singapore.

About 55% of the fund is at work in companies based in Japan. Roughly another 20% is in Australian stocks. Korea, Hong Kong, Singapore and New Zealand are the markets with the next largest exposures.

The top-10 holdings are well-known international brands such as Samsung, Toyota and Sony. VPL provides international investors with low-cost access to major firms in the developed Pacific markets. VPL lagged VEU over the past five years but outperformed over the past 10 years.

Investors seeking above-average yield should take a look at the Vanguard Short-Term Corporate Bond ETF. VCSH offers you a broad portfolio of short-term corporate bonds in one fund. VCSH is less volatile than longer-term, fixed-income ETFs and equity funds. The entire portfolio consists of investment grade debt.

VCSH has a low average effective duration of below 3. That means if interest rates decline 1%, investors can expect an increase of less than 3% in the value of the fund, and vice versa. That’s a sign of low volatility. VCSH looks appropriate for yield-seeking investors who prefer low price volatility.