Vanguard Funds: Choosing The Right Investment For You

Vanguard is one of the world's largest investment management and advisory services companies, with about $9.7 trillion in assets under management. The company offers a total of 423 funds, 208 of which are available in the U.S. Vanguard is a full-service broker, offering low-cost investing for long-term buy-and-hold investors and retirement savers. Vanguard funds tend to be low in cost and pursue simple, reliable strategies. Vanguard covers the bases with excellent choices among the three main asset classes: US stocks, international stocks, and bonds.

- Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)

- Vanguard 500 Index Fund Admiral Shares (VFIAX)

- Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)

- Vanguard Total World Stock Index Fund Admiral Shares (VTWAX)

- Vanguard Value Index Fund Admiral Shares (VVIAX)

- Vanguard Wellington Fund Investor Shares (VWELX)

- Vanguard Target Retirement 2070 Fund (VSVNX)

- Vanguard Total Bond Market Index Fund (VBTLX)

- Vanguard Balanced Index Fund (VBIAX)

- Vanguard Small-Cap Value ETF

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)

The Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is one of the best Vanguard funds to buy and hold. It offers a broad market index with a low-cost fund, making it appealing for long-term investors. VTSAX tracks the CRSP US Total Market Index, which includes more than 3,600 domestic equities across all 11 market sectors, from small- to large-cap stocks, and both value and growth styles.

VTSAX has a low turnover rate of 2.2% and an expense ratio of 0.04%. This is because the fund's benchmark is designed to track the total investable US stock market, rather than trying to pick and choose the best stocks. Instead, it invests in all possible stocks relative to their market capitalization, making it a great way to passively track the returns of the US stock market.

However, to access this fund, investors need a minimum initial investment of $3,000. This fund is ideal for those seeking a passive, broad-market investment strategy, wanting exposure to the total US stock market, and a low-cost, low-turnover fund.

VTSAX can be a good option for those seeking long-term investment and wanting to track the performance of the overall US stock market.

Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)

VTIAX is a broad-market fund that provides exposure to the entire ex-U.S. stock market in a single fund. It tracks over 8,600 stocks represented by the FTSE Global All Cap ex US Index, which includes both international developed and emerging markets. This index covers countries such as the U.K., France, Germany, Japan, Switzerland, China, India, and Brazil.

One of the advantages of investing in VTIAX is the ability to save on individual currency transaction fees or the need for American depositary receipts (ADRs). The fund boasts a low turnover rate of 3.9% and a competitive expense ratio of 0.12%. However, it requires a minimum initial investment of $3,000.

VTIAX is suitable for investors seeking global diversification and wanting to replicate the performance of international stock markets. It offers a simple and cost-effective way to gain exposure to a wide range of international companies.

When considering Vanguard funds or any other investment, it is essential to assess your financial goals, risk tolerance, and investment horizon. Conduct thorough research, evaluate fund performance, and consider seeking advice from a qualified financial advisor before making any investment decisions.

Vanguard Value Index Fund Admiral Shares (VVIAX)

The Vanguard Value Index Fund Admiral Shares (VVIAX) is a fund focused on large-cap stocks that produce value instead of growth. This fund is closed to new investors, but the Admiral Shares version can be purchased for a minimum of $3,000. The advantages of this fund include its well-diversified portfolio and low turnover of stocks. The stocks in the fund are in the top 70% of all domestic stocks based on market capitalization.

Value stocks tend to grow at a slower rate and may produce income for investors. Vanguard classifies this fund as moderate to aggressive. Funds in this category are well-diversified but subject to volatility because nearly all of their assets are in common stocks. The fund has the potential for high reward but also comes with high risk.

As of 27 November 2023, the fund has assets totalling almost $139.39 billion invested in 344 different holdings. The fund has returned -0.10% over the past year, 12.18% over the past three years, 7.81% over the past five years, and 9.05% over the past decade. The fund was launched in November 1992.

The fund has an expense ratio of 0.05%, compared to a category average of 0.96%. This fund is focused on value stocks, which can trail the broader stock market depending on economic circumstances. The fund also faces stock market risk with the cyclical rise and fall of the market.

Vanguard Wellington Fund Investor Shares (VWELX)

VWELX's strategy involves allocating two-thirds of its funds to large- and mid-cap stocks with high dividends and low valuations. This approach targets out-of-favour stocks with potential for growth. The remaining one-third of the fund is invested in investment-grade corporate bonds, providing a stable income stream.

The fund boasts a competitive expense ratio of 0.26% and offers an above-average 30-day SEC yield of 2.3%. This combination of stock and bond investments makes it an attractive option for those seeking a balanced portfolio with the potential for long-term gains.

When considering Vanguard funds, it's important to remember that they are known for their low-cost structure, making them appealing for long-term investors. Vanguard's passive investing approach, which mirrors market indices, has proven profitable over time, as markets tend to rise in the long run.

Overall, Vanguard Wellington Fund Investor Shares (VWELX) stands out as a well-established and robust choice for investors seeking a balanced approach, with a mix of equity and fixed-income investments, all while benefiting from Vanguard's low-cost investment model.

Vanguard Target Retirement 2070 Fund (VSVNX)

The fund is designed for investors looking to retire around the year 2070, offering a single-ticker portfolio solution with a dynamic asset allocation strategy. Currently, VSVNX is allocated 90% to global stocks and 10% to global bonds. Over time, the fund will gradually increase its bond allocation, prioritising capital preservation and income as it approaches the target retirement year.

VSVNX has a Morningstar Medalist Rating and a low expense ratio of 0.080%. As of September 28, 2024, it had total assets of 963.1 million with a NAV of 27.55 and a 1-day return of −0.22%.

VSVNX's investment style is Large Blend, with high credit quality and moderate interest rate sensitivity. The fund's top holdings include Vanguard's Total Stock Market Index Institutional Plus, Total International Stock Index Investor, Total Bond Market II Index Investor, and Total International Bond II Index Institutional.

Overall, Vanguard Target Retirement 2070 Fund (VSVNX) is a sensible choice for investors seeking a simple, low-cost, and passive investment strategy, allowing them to benefit from a diversified portfolio that automatically adjusts its risk profile over time.

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