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3 Core Vanguard ETFs Almost Any Investor Can Use

Barchart·10/11/2026 06:00:02

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Vanguard is one of the largest providers of exchange-traded funds in the world, with Vanguard ETFs boasting well more than $4 trillion in assets under management (AUM). There's good reason for that: The asset manager's numerous investment strategies are already useful to investors of all stripes—the simple ETF "wrapper" makes them all the more simple, accessible, and cost-effective.

The best Vanguard ETFs are big and "liquid," meaning they are easy to buy and sell. They're also commonly found in low-cost portfolios; that's because most Vanguard ETFs are inexpensive index funds that are frequently the cheapest alternatives in the marketplace.

So if you're trying to build a portfolio without getting drained by fees and other costs, you'll want to read on.

Here are some of the best Vanguard ETFs you can buy for the core of your portfolio, whether you're building it from scratch or looking to replace some of your current holdings with lower-fee fare.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Why Vanguard?

Vanguard is the No. 2 asset manager in the world with about $13 trillion in assets under management, only trailing peer BlackRock (with more than $15 trillion). With that size comes a massive breadth of investment options, as well as efficiencies of scale that are difficult for smaller investment companies to match.

Consider this: The average asset-weighted expense ratio for U.S. mutual funds and ETFs is currently 0.44%, or $4.40 annually for every $1,000 invested.

Vanguard already offered a low 0.08% average expense ratio across all its funds. Then in 2025, that number dropped to 0.07% after Vanguard cut expenses on 168 share classes across 87 funds. This year, it slimmed that figure to 0.06% when it slashed fees on another 84 share classes across 53 funds. All told, Vanguard estimates that's $600 million in savings for investors, which the firm claims is its "largest-ever two-year combined cost reduction."

It's also worth noting that the best Vanguard ETFs are often passive index funds. That means they are not aggressive vehicles that depend on overpaid managers to outperform the market, but rather "set it and forget it" funds tied to a fixed index of assets. This less flashy but more consistent approach has generally been shown to provide better long-term results.

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The Best Vanguard ETFs

There is a massive universe of exchange-traded funds out there. So what makes the best Vanguard ETFs stand out over other exchange-traded funds? A few factors include:

Relatively low fees, not just nominally low fees. After all, just because a fund only costs you a couple dollars per year doesn't mean there aren't a bunch of cheaper alternative out there.
Long-term potential. For the purpose of this article, we're not talking about tactical or short-term bets, but rather foundational investments for the long haul.
Different approaches for different investors. Also for the purpose of this article, we're not looking for a single one-size-fits-all Vanguard ETF. Instead, the list is intended to be a menu of differentiated options that you can pick and choose from, based on your personal goals.

One final word of caution: Every investment carries risk, and even the best funds can lose you money if Wall Street suffers widespread declines.

With that disclaimer out of the way, let's look at a few picks from my list of the best Vanguard ETFs.

Vanguard S&P 500 ETF

Style: U.S. large-cap stock
Assets under management: $1 trillion*
Dividend yield: 1.0%
Expense ratio: $0.03%, or 30¢ per year for every $1,000 invested

Look. You might not be surprised, but it doesn't mean this ETF doesn't belong here.

I tend to start every broad "best ETFs" with an S&P 500 index fund if one applies. You might call it laziness. But I call it looking at the scoreboard.

The S&P 500 is the performance benchmark for many actively managed funds that invest in large-cap stocks.** Said differently, these investment professionals are tasked with exceeding the S&P 500's performance. Unfortunately, according to S&P Dow Jones Indices, the majority of active large-cap U.S. equity funds have failed to beat the S&P 500 on a total-return basis (price plus dividends) in 16 consecutive years, and in 22 of the past 25 years.

But even if you compare the Vanguard S&P 500 ETF (VOO) and other low-cost S&P 500 index funds to all large-cap funds—active and index—they routinely land in the top quartile by performance across most meaningful time periods. So even among other indexes, the S&P 500 is great.

And as long as that remains the case, I'm going to keep leading with it.

The S&P 500 Index, which is made up of 500 of America's largest companies, is considered a gauge of the U.S. economy because its components collectively represent the diversity of American industry.

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But it's hardly "balanced." The index, like many others, is market capitalization-weighted, which means the greater the company size by market cap (stock price x outstanding shares), the greater the "weight" it's given in the index, the greater the assets an index fund will invest in that company, and the more impact those shares have on the performance of the fund. Currently, trillion-dollar-plus technology companies Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT) are among the largest constituents in the S&P 500, and thus the largest components of VOO. Indeed, technology is a huge part of the economy, so it makes up a huge part of VOO's assets—more than a third currently. On the flip side, real estate, materials, and utilities merit less than 3% apiece.

This can be problematic. A hit to the technology sector would cause more short-term harm to the VOO than weakness in any other sector. You might need to buy other complementary funds if you want more balanced sector exposure. But over the years, the S&P 500's sectors and holdings have shifted significantly several times, and that hasn't kept the index from delivering growth to people who have invested in S&P 500 funds.

In short: The Vanguard S&P 500 ETF is one of the cheapest ways to buy a wide and fairly diversified set of American blue chips that has historically delivered excellent performance. That's why this strategy has accumulated $1.8 trillion in assets across all of its share classes, and that's what makes VOO one of Vanguard's best ETFs.

* Vanguard fund assets are spread across multiple share classes, including mutual funds and ETFs alike. Assets listed for each fund in this story are for the ETF share class only.

** There are different ways to define "cap" levels. We're adhering to Morningstar's definition, which says the largest 70% of companies by market capitalization within a fund's "style" are large caps, the next 20% by market cap are mid-caps, and the smallest 10% by market cap are small caps.

Vanguard FTSE All-World ex-US Index Fund ETF Shares

Style: International stock
Assets under management: $70.4 billion
Dividend yield: 2.4%
Expense ratio: 0.04%, or 40¢ per year for every $1,000 invested

There's a great big universe of companies out there beyond our borders. That's where Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) comes in.

This Vanguard ETF invests in about 3,850 stocks across a few dozen countries, both developed (more established but slower-growing) and emerging (riskier but higher rates of expansion). It holds stocks of all sizes, but it leans heavily into large companies. And like many other Vanguard funds on this list, VEU is cap-weighted, so the stocks with the most impact on performance currently include emerging-market tech giants such as Taiwan Semiconductor (TSM) and Samsung Electronics, as well as European mainstays like Novartis (NVS) and HSBC Holdings (HSBC).

As a general rule, large, international dividend payers distribute higher rates of income than their American counterparts, resulting in a solid yield well above 2% that's more than twice what the S&P 500 offers.

You can get a much wider portfolio of international stocks with a little more exposure to smaller companies via the Vanguard Total International Stock ETF (VXUS), which like VEU earns Morningstar's highest Medalist ranking of Gold. (Medalist rankings are forward-looking views of a fund's ability to outperform its peers.) VEU is a hair cheaper, however, and has delivered slightly better performance in the past. "Its low fee and expansive portfolio make it one of the best international stock funds available," Morningstar analyst Zachary Evens adds.

In an interconnected global economy, it's a bit naive to think that multinational companies only rise and fall based on their local economies. That's true for big U.S. names as well as the international giants that lead this Vanguard ETF. So if you want international diversification to truly play broad economic trends in 2026, consider layering VEU into your portfolio.

Vanguard Short-Term Treasury ETF

Style: Short-term U.S. Treasury bond
Assets under management: $34.8 billion
SEC yield: 4.6%
Expense ratio: 0.03%, or 30¢ per year for every $1,000 invested

Just like stocks, bonds have varying levels of risk and potential reward. The Vanguard Short-Term Treasury ETF (VGSH) focuses on a subset of bonds that have very low risk for two reasons: They have short maturities, and they're issued by the U.S. Treasury.

Maturity helps determine risk. Generally speaking, the longer the bond, the greater the risk that the bond might not be repaid. Interest rates come into play, too. When rates go higher, new bonds pay more, which tempt people to sell their old bonds for the new, higher-paying bonds. But the temptation is much greater when you're dealing with longer-term bonds with lots of payments remaining—and not so great for short-term bonds with one or just a couple payments left.

Meanwhile, U.S. Treasury bonds, which are backed by the full faith and credit of the U.S. government, are some of the highest-rated bonds on the planet. Is there 100% certainty they'll be repaid? No. But there is a higher likelihood of repayment than the vast majority of issuers out there.

Vanguard Short-Term Treasury ETF invests in more than 90 Treasury bond issues with maturities of between one and three years. And the lower risk is reflected in the averaged duration, which currently sits at just 1.9 years. So while a 1-percentage-point hike in interest rates would theoretically knock the aforementioned BND 5.7% lower in the short term, VGSH would decline by 1.9%. Conversely, VGSH might not rise as rapidly if market interest rates declined.

That's OK, as long as you understand what you're buying. If all you want is portfolio protection that can still generate some yield (well more than 4% currently), VGSH is one of the best Vanguard ETFs to own.

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Morningstar Investor provides a wealth of information and comparable data points about mutual funds and ETFs—fees, risk, portfolio composition, performance, distributions, and more. Morningstar experts also provide detailed explanations and analysis of many of the funds the site covers.

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