Many investors rely on Vanguard funds to keep their portfolios diversified and their costs low. That’s a strategy you can stick with over the long term – even if this year’s market roller-coaster ride has made you nervous in the short term.
After a decent start to 2020, the stock market entered bear territory in spring as the severity of the coronavirus pandemic became clear. Wall Street quickly recovered in April, but lately we’ve seen signs of serious economic distress return – for instance, when the Dow Jones Industrial Average shed 7% in a single session in mid-June with a drop of more than 1,500 points after a gloomy economic outlook from the Federal Reserve.
Will stocks bounce back and rally again in 2020? Perhaps. But one thing remains clear: Over the long term, stocks always trend higher. Bear markets, recessions and even a once-in-a-generation financial crises cannot keep Wall Street down for good. And Vanguard mutual funds and exchange-traded funds allow investors to enjoy in that long-term growth without paying exorbitant fees.
Whether you’re convinced stocks will keep powering higher in the near term, or just optimistic the next bull market will arrive soon, here are the 13 best Vanguard funds that can help you make the most of things.
Data is as of June 24.
Vanguard Total Stock Market Index Fund Admiral
- Assets under management: $860.7 billion
- Expense ratio: 0.04%
- Minimum investment: $3,000
- Exchange-traded alternative: Vanguard Total Stock Market ETF (VTI)
If you want to play the stock market, there’s no simpler and more effective way than the Vanguard Total Stock Market Index Fund Admiral (VTSAX, $74.87). Launched in 1992, this broad-based mutual fund offers exposure to the entire U.S. stock market. This includes small, medium and large stocks as well as both growth and value names.
What makes VTSAX one of the best Vanguard funds, then, isn’t a “flavor.” Rather, its rock-bottom cost – with its 4 basis points in fees among the lowest of any mutual fund out there – along with full diversification ensure that you can put your money to work without overthinking things.
With nearly 3,500 total holdings in the portfolio, Total Stock Market is true to its name in that it covers the totality of the U.S. stock market. But a significant feature is that the larger names carry more weight; consider that the top 10 holdings currently represent more than 20% of total assets. And since these stocks are mostly mega-cap tech stocks such as trillion-dollar Microsoft (MSFT), it’s perhaps unsurprising that 25% or so of the fund is also in the technology sector.
Still, if you’re looking to play a bull market, then you surely don’t want to shortchange these growth-oriented Silicon Valley names. So the weightings shouldn’t cause too much worry for long-term investors.