Best Vanguard ETFs March 2024 (2024)

For a straightforward approach to quickly indexing a portfolio of large- and mid-cap U.S. equities, investors can opt for VOO. This ETF tracks the , a benchmark of 500 large-cap U.S. stocks selected by the S&P committee to represent the overall U.S. market performance. Historically, the S&P 500 has produced strong returns over long periods. Since VOO’s inception in September 2010, the ETF has returned an annualized 11.86%. By keeping its expense ratio low at 0.03%, VOO can minimize tracking error significantly compared to the S&P 500 index’s total return.

Fund 10-year annualized rate as of March 1: 11.99%.

A popular, more diversified alternative to VOO is VTI. The ETF tracks the CRSP U.S. Total Market Index, which sports over 3,800 holdings. As a total market index ETF, VTI intends to provide investors with broadly diversified exposure to the entire investable U.S. market across value and growth styles, all 11 market sectors, and across small-, mid- and large-cap stocks. However, VTI is still market-cap weighted, meaning that its large-cap stocks occupy a proportionally larger share of the ETF’s overall portfolio. Historically, VTI has performed similarly to VOO due to this property.

Fund 10-year annualized rate as of March 1: 11.43%.

For investors with a shorter time horizon, more modest investment objectives, or lower risk tolerance, allocating high-quality fixed income can help reduce volatility and drawdowns. Bonds have historically returned less than stocks over long periods. But they have also provided a mixture of steady income and capital preservation, especially during market crashes and economic recessions. An easy way to invest in a diversified portfolio of U.S.-based bonds is with BND, which tracks the Spliced Bloomberg U.S. Aggregate Float Adjusted Index, a variant of the Bloomberg U.S. Aggregate Bond Index. This ETF features over 10,000 U.S. Treasury, agency, investment-grade corporate and mortgage-backed bonds, ranging from less than a year to 30 years.

Fund 10-year annualized rate as of March 1: 1.77%.

For some investors, allocating international, ex-U.S. market stocks may be a good idea for diversification. While U.S. stocks have historically outperformed international stocks over the last decade, there’s no guarantee this will continue. A great example is the “lost decade” of 1999 to 2009 when the S&P 500 index returned an annualized -0.9% due to the dot-com bubble and the Great Recession. To hedge against this, investors can buy VXUS, which tracks the Spliced Total International Stock Index, a variant of the FTSE Global All Cap ex-US Index. The ETF holds over 7,800 stocks from both international developed and emerging markets according to their current market-cap weight.

Fund 10-year annualized rate as of March 1: 4.07%.

VXUS isn’t the only option for broad international stock exposure. Vanguard also offers a similar VEU, which tracks the FTSE All-World ex-US Index. This ETF has a similar portfolio to VXUS in terms of geographical and sector representation, with many of the same top holdings. Both ETFs have returned nearly identical 10-year annualized returns, with VEU clocking in at 3.65% and VXUS at 3.63%. The difference is in the number of holdings, with VEU tracking only around 3,600 stocks. This is due to the exclusion of international small-cap stocks by the FTSE All-World ex-US Index, which only tracks large- and mid-cap stocks. Still, the market-cap weighted strategy ensures little difference in performance between VXUS and VEU historically. Because they track different indexes yet perform similarly, investors could use VEU as a tax-loss harvesting partner for VXUS.

Fund 10-year annualized rate as of March 1: 4.10%.

Investors tired of slicing and dicing their portfolio’s equity allocation can opt for maximum simplicity by buying VT. The ETF tracks the Spliced Total World Stock Index, a variant of the FTSE Global All Cap Index. By doing so, VT offers exposure to over 9,400 large-, mid- and small-cap U.S., developed and international stocks across all 11 market sectors. The ETF is allocated based on each geography’s current world market-cap weight, with exposure to stocks in North American, Pacific, European and emerging markets. This dynamic composition can change as the world’s market weights shift.

Fund 10-year annualized rate as of March 1: 8.06%.