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Vanguard exchange-traded funds (ETFs) are a popular choice for investors looking to build a low-cost, diversified portfolio— and for good reason. As one of the largest investment companies in the world, Vanguard has built its reputation around a straightforward mission: helping investors keep more of their returns.
It pioneered the low-fee revolution, not just through its mutual funds but also with its lineup of ETFs, which continue to benefit from the firm’s unique ownership structure. Because Vanguard is owned by its U.S.-based mutual funds, and in turn by the investors in those funds, it can operate at cost—keeping fees lower than many of its competitors.
Vanguard has also led the way with key innovations, including patenting the first ETF structured as a share class of a mutual fund, giving it unique tax efficiencies. In recent years, it’s made moves into new territory by expanding its lineup of active fixed-income ETFs and aggressively cutting fees across an already dirt-cheap lineup.
But with 91 ETFs to choose from in the U.S., it’s easy to get overwhelmed. Let's break down some of the best all-around, low-cost Vanguard ETFs to consider, no matter what your goals are.
What’s best will depend on your risk tolerance, time horizon, and objectives—but virtually all investors are well-served by broad diversification, low fees, and tax efficiency. These select Vanguard ETFs embody all three and are well-capitalized, with sufficient assets under management (AUM) and liquidity, plus low 30-day median bid-ask spreads.
The Vanguard S&P 500 ETF (NYSEMKT:VOO) tracks the well-known S&P 500 Index, which includes 500 of the largest U.S. companies screened for size, liquidity, and earnings quality. It’s a simple buy-and-hold ETF that gives you exposure to the blue chip core of the U.S. equity market, with a portfolio currently tilted toward the technology sector at around 30%.
Thanks to its low turnover and the ETF structure’s in-kind creation/redemption mechanism, it is highly tax efficient and hasn’t distributed capital gains. With an ultra-low expense ratio of just 0.03% and a 10-year annualized return of 12.46% before taxes, it’s a reliable, low-cost option for long-term growth.
The Vanguard Total Stock Market ETF (NYSEMKT:VTI) offers a more diversified alternative to the previous ETF by tracking the CRSP U.S. Total Market Index instead of the S&P 500. That means it holds more than 3,000 stocks, giving you exposure to large-, mid-, and small-cap companies across the entire U.S. equity market. However, it’s still market-cap-weighted, so the top holdings look a lot like the Vanguard S&P 500 ETF.
This one carries the same ultra-low 0.03% expense ratio, with minimal turnover and strong tax efficiency. Its 10-year annualized return sits at 11.74%, slightly behind the other ETF due to the relative underperformance of small- and mid-caps over the past decade.
The Vanguard Growth ETF (NYSEMKT:VUG) tracks the CRSP U.S. Large Cap Growth Index, which pulls the largest stocks from broader benchmarks like the Vanguard Total Stock Market ETF and filters them for higher earnings growth, price-to-earnings, and price-to-book ratios. The result is a portfolio with a heavy tilt toward the tech sector at about 57%, and all of the "Magnificent Seven" stocks show up among its top holdings.
With a low 30-day SEC yield of just 0.49%, it is even more tax efficient than the previous two ETFs mentioned since there are fewer taxable distributions. It has delivered a 10-year annualized return of 14.21%, outperforming broader benchmarks because the past decade has been strong for large-cap growth stocks. That trend may not continue, but it remains a solid long-term choice with a low 0.04% expense ratio.
The Vanguard Value ETF (NYSEMKT:VTV) takes a different approach than the Vanguard Growth ETF. It tracks the CRSP U.S. Large Cap Value Index, targeting stocks with lower earnings growth but cheaper valuations based on price-to-book and price-to-earnings ratios. The portfolio leans toward more traditional sectors like financials, health care, consumer staples, and industrials.
This ETF has lagged over the past decade, with a 10-year annualized return of 10.34%, but could outperform if there’s a sustained shift back to value stocks like we saw in 2022. This fund is a better fit for contrarian investors who aren’t chasing momentum or what’s currently popular. It also pulls double duty as a decent dividend ETF, offering a 2.17% 30-day SEC yield. Like the Vanguard Growth ETF, it charges a low 0.04% expense ratio.
While the Vanguard Value ETF offers an above-average yield as a byproduct of its focus on value stocks, it’s not a dedicated dividend strategy. For investors specifically targeting income, Vanguard offers the Vanguard High Dividend Yield ETF (NYSEMKT:VYM), which tracks the FTSE High Dividend Yield Index. The index excludes real estate investment trusts (REITs), screens out companies that haven’t paid a regular dividend in the last 12 months or aren’t expected to, and then ranks the rest by forward dividend yield. Holdings are then weighted by market cap.
The Vanguard High Dividend Yield ETF holds a diversified portfolio of over 500 blue chip stocks, with notable overlap with the Vanguard Value ETF, but delivers a higher 30-day SEC yield of 2.67%. The expense ratio is slightly higher at 0.06%, though still very reasonable. As with the other ETF, value and dividend stocks have lagged over the past decade, so its 10-year annualized return is lower at 9.99%, though it did pull ahead during the rotation into value in 2022.
If you don’t need the higher yield of the Vanguard High Dividend Yield ETF or prefer to avoid the value stock tilt that comes with the Vanguard Value ETF, the Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) offers a different approach to dividend investing. It tracks the S&P U.S. Dividend Growers Index, which includes companies with at least 10 consecutive years of dividend growth. The index also applies a quality screen by excluding the top 25% of companies with the highest dividend yields. This ETF is market-cap weighted, with a 4% cap on individual holdings to prevent overconcentration.
Because it doesn't chase yield, it includes a more balanced mix of sectors—including a fair amount of tech—making its sector composition closer to the Vanguard S&P 500 ETF. Think of it as a higher-quality play on blue chip stocks that also offers a modest income stream, with a 1.73% 30-day SEC yield. Over the past 10 years, VIG has delivered a solid annualized return of 11.33%, keeping pace with broader market ETFs.
Vanguard ETFs are easy to access and can be bought through virtually any brokerage platform -- not just Vanguard’s. Just search for the ETF by name or ticker symbol and make sure you’re selecting the one listed on a U.S. exchange since Vanguard also offers Canadian and international versions. From there, you invest in any of their ETFs just like you would with any stock.
The best way to get started is to combine different Vanguard ETFs to build a diversified portfolio. For example, you could use VTI as your core holding for broad exposure to the entire U.S. stock market. If you're more risk-tolerant and focused on long-term capital appreciation, you might add the Vanguard Growth ETF for a growth tilt. If you prefer a contrarian approach, you could lean into value with the Vanguard Value ETF. For income-focused investors, mixing the Vanguard Dividend Appreciation ETF and Vanguard High Dividend Yield ETF can help you capture both dividend growth and high yield. There’s no shortage of ways to create a portfolio of Vanguard ETFs you can build and stick with.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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