Best Vanguard Mutual Funds For Cost-Conscious Investors

Vanguard is a leading provider of low-cost mutual funds. The company is owned by its funds, which are in turn owned by its investors. This means that profits generated by the funds are returned to investors in the form of lower fees. Vanguard's average expense ratio is 82% lower than the industry average. The company offers a wide range of investment choices, including passive index funds and actively managed funds, as well as funds that focus on specific industries and geographic markets. Some of the cheapest Vanguard mutual funds include the Vanguard 500 Index Fund Admiral Shares, the Vanguard Total Stock Market Index Fund Admiral Shares, and the Vanguard Dividend Appreciation Index Fund Admiral Shares.

Vanguard's average expense ratio is 82% lower than the industry average

This means that the less you pay for your funds, the more you keep in your pocket. Vanguard's low fees can help you save. There are no trading commissions when you buy and sell Vanguard low-cost mutual funds or ETFs online. If you decide to invest in individual stocks, bonds, or CDs (certificates of deposit), or in other companies' mutual funds or ETFs, you may pay a brokerage commission—but Vanguard keeps those low too.

Vanguard was built to keep your costs low. There are no account service fees. Vanguard's average expense ratio of 0.08% reflects this. The industry average, excluding Vanguard, is much higher at 0.44%.

Vanguard's low-cost approach can help you make the most of your money. Their mutual funds are simple and have cheap fees. Vanguard is one of the world's leading asset managers, with $7 trillion under management. This is due in part to the firm's commitment to providing simple, low-cost mutual fund offerings to the general public instead of complicated and costly offerings that don't deliver.

Vanguard's average expense ratio of 0.08% is significantly lower than the industry average of 0.44%, demonstrating their commitment to keeping costs low for their clients.

Vanguard's low fees

Vanguard is one of the world's leading asset managers, with a staggering $7 trillion under management. The company is known for its commitment to providing simple, low-cost mutual fund offerings to the general public instead of complicated and costly offerings that don't deliver.

Vanguard's average mutual fund and ETF (exchange-traded fund) expense ratio is 82% less than the industry average. As of December 31, 2023, Vanguard's average expense ratio was 0.08%, while the industry average was 0.44%.

Vanguard's low-cost mutual funds are particularly appealing for long-term investors. The less you pay for your funds, the more you keep in your pocket. Vanguard's low fees can help you save more for retirement or other long-term goals.

In addition to low fees, Vanguard also offers no-trading commissions when you buy and sell Vanguard mutual funds or ETFs online. There are also no account service fees for certain types of accounts.

• Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) - Tracks the CRSP U.S. Total Market Index with a low 2.2% turnover rate and a 0.04% expense ratio.
• Vanguard 500 Index Fund Admiral Shares (VFIAX) - Tracks the S&P 500 with a 0.04% expense ratio.
• Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) - Tracks the FTSE Global All Cap ex U.S. Index with a 0.12% expense ratio.
• Vanguard Russell 1000 Growth Index Fund (VRGWX) - Charges a very low 0.07% annual expense ratio and tracks some of the biggest growth stocks in the U.S.
• Vanguard FTSE Social Index Fund (VFTNX) - Tracks the FTSE4Good US Select Index and holds large and mid-cap stocks that meet environmental, social, and corporate governance criteria.
• Vanguard Growth & Income Fund (VGIAX) - Offers dividend income and growth of principal with excellent diversification and a 0.09% expense ratio.

Vanguard's Total Stock Market Index Fund Admiral Shares

VTSAX has an expense ratio of 0.04%, continuing Vanguard's commitment to providing low-cost investment options. The minimum initial investment for this fund is $3,000, making it accessible to a wide range of investors. As of October 17, 2024, the fund's share price was $140.09, and it had assets under management totalling $401.7 billion.

The fund is also offered as an ETF (Exchange-Traded Fund), known as the Vanguard Total Stock Market ETF (VTI). ETFs differ from mutual funds in that they can be bought and sold throughout the trading day, like stocks, and often provide greater tax efficiency.

Overall, Vanguard's Total Stock Market Index Fund Admiral Shares offers a straightforward, low-cost, and diversified investment strategy for investors seeking broad exposure to the U.S. stock market.

Vanguard's S&P 500 ETF

Vanguard is known for its low-cost, high-quality mutual funds. The Vanguard S&P 500 ETF (VOO) is one of the firm's offerings that follows the S&P 500 Index, a benchmark index of the top 500 publicly traded US corporations.

The VOO ETF provides exposure to a diverse range of large-cap US stocks across various sectors, including well-known companies like Microsoft, Nvidia, and Apple. With an expense ratio of 0.03%, it is an affordable option for investors seeking broad stock market coverage.

Compared to the Vanguard 500 Index Fund Admiral Shares (VFIAX), which has a slightly higher expense ratio of 0.04%, the VOO ETF offers a more cost-effective way to gain access to the S&P 500. The VFIAX fund, with about $1.3 trillion in total net assets, is the second-largest Vanguard fund strategy.

The VOO ETF is also a good choice for investors who prefer the flexibility and liquidity of exchange-traded funds (ETFs). ETFs can be traded throughout the day, providing more control over entry and exit points compared to traditional mutual funds, which are typically traded only at the end of the trading day.

Additionally, the VOO ETF can be purchased commission-free through Vanguard Brokerage Services, further reducing the costs associated with investing in this fund.

Overall, the Vanguard S&P 500 ETF (VOO) is a low-cost, diversified investment option that provides exposure to the largest and most established US companies. With its low expense ratio and the flexibility of an ETF, it is a compelling choice for investors seeking broad market coverage at a reasonable price.

Vanguard's Total Bond Market ETF

The expense ratio for this fund is 0.05%, which is 82% lower than the industry average. This means that investors keep more of their returns, as fund expenses are significantly lower than those of competitors. Vanguard's unique structure ensures that costs remain low, benefiting investors.

The Total Bond Market ETF provides access to a wide range of "investment-grade" bonds, which are debt securities from corporations or government entities with a low risk of default. This fund is ideal for those seeking reliable income and lower-risk investments. While the bond market may not offer the same potential for quick gains as the stock market, it provides stable returns and is a valuable addition to any portfolio.

The Vanguard Total Bond Market ETF is also offered as a mutual fund, the Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX). This mutual fund has a minimum initial investment of $3,000 and is a popular choice for those seeking a simple, low-cost bond investment strategy. With its massive scale and low costs, it is one of the best bond funds available.

For investors seeking a well-diversified, low-cost bond investment, the Vanguard Total Bond Market ETF is an excellent choice. With its focus on high-quality bonds and low fees, it provides a stable and reliable option for those looking beyond traditional stock investments.

Frequently asked questions