Are you thinking about investing in index funds? Check out the popular and respected Vanguard and the exact Vanguard index funds to buy this year.
In 1976, Vanguard founder John Bogle pioneered indexing, a radical approach to investment from traditional, actively managed funds. He founded the first index fund to follow the S&P 500. The company now has over 100 Vanguard funds that track indexes in the US and international markets in both stocks and bonds.
This article will provide an overview of the best Vanguard index funds. We will evaluate the features of each fund and find out which one suits you and your specific goals as an investor.
The 10 Best Vanguard Index Funds to Buy and Hold
Vanguard index funds are some of the most well-known investment vehicles available today, and for good reason.
Unlike actively managed funds, index funds provide an inexpensive way to track the performance of a given market or sector. In addition, index funds offer broad diversification, which can help mitigate risk. However, it is important to remember that index funds are not without risk.
Below are some of the best Vanguard index funds you might want to add to your portfolio:
1. Vanguard Total Stock Market Index Fund (VTSAX)
The Vanguard Total Stock Market Index Fund (VTSAX) offers investors access to the entire US stock market. The fund is managed by Vanguard, one of the largest investment management companies in the world.
VTSAX is a passively managed index fund that aims to track the Center for Securities Price Research (CRSP) US Common Market Index, a benchmark index. The fund is one of the largest and most popular Vanguard index funds, along with VUG and VTI.
The minimum investment for VTSAX is $3,000 and the expense ratio is 0.04%. With over 3,500 shares in this fund, investors can benefit from low costs, potential tax efficiency and excellent diversification.
VTSAX is a great choice for investors looking for broad access to the US stock market at a low cost.
2. Vanguard 500 Admiral Shares Index Fund (VFIAX)
If you’re looking for an index fund that tracks the Standard & Poor’s 500 (S&P 500) index, Vanguard 500 Index Fund Admiral Shares (VFIAX) is a popular option. The expense ratio of this fund is 0.04%, which is low for an index fund. In addition, the minimum investment is $3,000 and the fund’s asset class is a large-cap mix.
VFIAX invests in stocks in the S&P 500, which is the top 500 US companies by market capitalization. The fund’s diversification spans many sectors, including technology, healthcare, finance, consumer goods, and industrials.
The fund’s largest assets are Apple, Microsoft, Amazon, Facebook and Berkshire Hathaway. If you are looking for an inexpensive way to invest in a diversified portfolio of large-cap US stocks, VFIAX is a great option.
If you want to invest in the S&P 500 and diversify your portfolio outside of the US, consider building a portfolio that invests in both VTSAKS and VFIAKS.
3. Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)
The Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) tracks the performance of a benchmark index that measures the return on investments in stocks issued by non-US companies.
VTIAX tracks the dynamics of the FTSE (Financial Times Stock Exchange) Global All Cap ex US index. It is a floating-point-adjusted market capitalization-weighted index based on publicly traded companies in developed and emerging markets.
It is diversified across over 5,400 assets, with no country representing more than 23% of the fund’s assets. The fund has a reasonable expense ratio of 0.11%, which is well below the average of an actively managed international equity mutual fund. This will appeal to investors looking to expand their presence in global markets outside of the US.
4. Vanguard Real Estate Admiral Shares Index Fund (VGSLX)
The Vanguard Real Estate Index Fund Admiral Shares provides a broad diversification of US real estate investment funds (REITs), with a focus on large-cap companies. REIT is a type of investment that owns real estate and invests primarily in income-producing real estate.
VGSLX was founded in 2004 and is registered in the USA. It tracks the performance of the Morgan Stanley Capital International (MCSI) US IMI Real Estate 25/50 Index, a broadly diversified investment market index of US REIT stocks.
These REITs tend to be slightly riskier and more volatile. Most likely, they will fluctuate along with the stock market. Sites that allow you to invest in real estate, such as crowdfunding platforms, are another way to access real estate outside of the stock market.
5. Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
Do you want to invest in bonds? The Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) might be a good fit for you. It is an index fund that tracks the performance of the US bond market. The fund invests in a variety of bonds, including treasury, corporate and mortgage-backed securities.
The fund has a low expense ratio of 0.05% and requires a minimum investment of $3,000. VBTLX is an excellent choice for investors looking for a diversified way to invest in the bond market. The fund is suitable for long-term investments and has a history of superior performance. Overall, this is a great choice for investors looking for an inexpensive way to invest in the bond market.
6. Vanguard Admiral Shares Growth Index Fund (VIGAX)
The Vanguard Growth Index Fund Admiral Shares (VIGAX) aims to track the performance of the US Large Cap Growth Index CRSP. The fund invests in large-cap stocks that are expected to rise faster than the market as a whole.
VIGAX is a passively managed index fund trying to match the performance of the underlying index. The expense ratio for VIGAX is 0.05%, which is below the average expense ratio for growth funds. The minimum initial investment for VIGAX is $3,000 and there is no minimum subsequent investment.
7. Vanguard Balanced Index Fund Admiral Shares (VBIAX)
If you’re looking for a solid investment that offers you a little bit of everything, you can’t go wrong with Vanguard Balanced Index Fund Admiral Shares (VBIAX). This fund is designed to provide investors with a mix of stocks and bonds that promotes stability and long-term growth.
The portfolio tracks two indices representing the US equity markets and the US taxable bond markets, investing about 60% in equities and 40% in bonds. And with a low cost ratio of 0.07%, VBIAX offers exceptional value. So if you are looking for a fund that will give you the best of both worlds, look no further than VBIAX.
8. Vanguard Dividend Growth Fund (VDIGX)
The Vanguard Dividend Growth Fund (VDIGX) specializes in investing in dividend-paying stocks. The fund aims to provide long-term capital growth through the reinvestment of dividends and capital gains. VDIGX invests in various stocks, including large, medium and small capitalization companies.
VDIGX has an expense ratio of 0.22%. The minimum investment for VDIGX is $3,000 for regular accounts and $500 for IRA accounts, making it a good choice for investors looking for long-term capital growth.
In addition, the fund offers various reinvestment options, allowing you to increase your investments over time. However, it is important to remember that stock prices can fluctuate and there is always the possibility of losses.
9. Vanguard Tax-Managed Balanced Fund Admiral Shares (VTMFX)
If you are looking for a balanced investment approach with maximum tax efficiency, Vanguard Tax-Managed Balanced Fund Admiral Shares (VTMFX) may be the right choice for you. Fund managers use a “tax management” strategy to minimize your tax liability, which means they invest 50% in the stock market and 50% in tax-free bonds.
While there is no guarantee that VTMFX will outperform other investments, it is worth considering if you are looking for a way to keep more of your money in your pocket when it comes time to pay taxes.
10. Vanguard Trusted Pension Funds
Anyone who has ever invested in a Vanguard Target retirement fund can tell you that this is a great way to save for retirement. But what exactly are they? Vanguard Target Retirement Funds automatically rebalances your portfolio as you approach retirement.
This means that if the stock market falls, your fund will automatically sell some of your shares and buy more bonds, which are less risky. And as you approach retirement age, the fund will gradually move more and more of your money into bonds until you are primarily investing in cash and annuities.
Thus, you do not have to worry about managing your investment portfolio. Instead, the fund does it for you. So if you’re looking for a laissez-faire retirement fund, Vanguard Target’s retirement fund might be right for you.
Are Vanguard Index Funds a Good Investment?
Vanguard index funds are a good investment because they offer a low expense ratio, which means that the fees associated with these funds are lower than those of actively managed funds. These index funds provide broad diversification, which can help minimize risk.
What is the most popular Vanguard fund?
Vanguard Total Stock Market Index Fund (VTSAX) and Vanguard 500 Index Fund Admiral Shares (VFIAX) are Vanguard’s two most popular funds.
Conclusion – Vanguard Index Funds
Vanguard is one of the highest rated investment groups with the highest rated index funds. However, do your research and due diligence before choosing one of their funds.
Your choice of index fund largely depends on your financial goals and personal preferences, which should be clear before you choose the index you want to track.
This article originally appeared on Wealth of Geeks.