-+ 0.00%

3 Top-Tier Vanguard ETFs to Buy

Barchart·08/01/2026 11:20:52

语音播报

Vanguard exchange-traded funds (ETFs) are among the most popular funds out there, and for good reason. This asset manager's wide variety of 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.

That's all to say that if you're trying to build a portfolio without getting drained by fees and other costs, check out our recently expanded list of the best Vanguard ETFs you can buy now. This list has something for everyone—whether you care about emerging markets or developed markets, small-cap stocks for growth or solid blue-chip stocks for the dividends, there's a Vanguard ETF out there for you.

We'll start with a little ETF education, then move on to the picks.

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.

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.

Let's take a look at three of the picks from my much more comprehensive list of the best Vanguard ETFs.

Vanguard S&P 500 ETF

Style: U.S. large-cap stock
Assets under management: $979 billion
Dividend yield: 1.1%
Expense ratio: $0.03%, or 30¢ per year for every $1,000 invested

I have a tendency to start every broad "best ETFs" list with the same type of product: an S&P 500 index fund.

It'd be easy to chalk it up to laziness. But consider this: 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 is made up of 500 of America's largest companies. It's considered something of a gauge of the U.S. economy just because its components collectively represent the diversity of American industry.

Invest With CIBC

CIBC Investor's Edge lets you trade U.S. and Canadian stocks and ETFs, options, mutual funds, and bonds through registered accounts like FHSAs, TFSAs, RRSPs, and RESPs, as well as non-registered accounts.

Sign up with our link today and use promo code EDGE2026 to get 200 free trades with CIBC Investor's Edge.

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 $1.5 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 U.S. Multifactor ETF

Style: U.S. multifactor
Assets under management: $703.0 million
Dividend yield: 1.4%
Expense ratio: 0.18%, or $1.80 per year for every $1,000 invested

Most investment funds are designed to give you exposure to a certain part of the market, however wide or narrow that part of the market might be. The whole stock market. A sector. A country. Certain types of bonds. You get the picture. To find more ideal holdings within that slice of the market, index funds might have certain inclusion criteria, and actively managed funds will rely on managers' discretion. But the purpose of these funds largely remains "access to such and such part of the market."

However, if you just wanted, say, a great collection of stocks no matter what they might look like, you might want to seek out "multifactor" funds.

Index provider MSCI defines factors well: "A factor is any characteristic that helps explain the long-term risk and return performance of an asset." If you've invested for any amount of time, you're already well-aware of the two most prominent factors: value and growth. But there are others, including volatility, dividend yield, price momentum, and more. A multifactor fund, then, invests in securities that meet criteria across several factors in hopes of building a more optimal portfolio.

The Vanguard U.S. Multifactor ETF (VFMF) is an actively managed multifactor fund, though it sticks tightly to a rules-based quantitative model to ensure its holdings meet several factor gates. After an initial universe of U.S. stocks is screened to remove the 20% most volatile stocks across each market cap grouping, the remaining stocks are chosen based on three more factors:

Value: Book value-to-price and forward earnings-to-price (also operating cash flows-to-price for non-financial-sector companies)
Quality: Financial sector: Return on equity, share issuance; Non-financials: Return on equity, gross profitability, change in net operating assets, leverage
Momentum: Total returns (price plus dividends) from 12 months ago to one month ago, total returns from 7 months ago to one month ago, and the intercept from a one-year regression of stock returns on their regional benchmark.

The resulting portfolio is … well, Morningstar categorizes it as "mid-cap value," but that's misleading. In truth, it's just extremely well-balanced across market caps right now, at a 30%/20%/25%/25% blend of large-, mid-, small-, and micro-cap stocks. (Micro-caps represent the smallest 3% of stocks by market capitalization and are often included as part of a fund's small-cap allocation.) From a sector perspective, financial stocks are the top weight at 25%, followed by technology (15%), healthcare (15%), consumer discretionary (12%), and energy (11%).

But Vanguard U.S. Multifactor's nature suggests that these size and sector weightings could fluctuate, and in fact, they do. What matters is whether you're getting something better than ordinary, and on that front, VFMF does the job.

VFMF is fairly young, having launched in 2018, so five-year returns are our best gauge. The multifactor ETF has outperformed the S&P 500 by more than 1 percentage point over that time on a total-return basis. That's respectable. However, the S&P 500 is predominantly large-cap, which has also beaten the pants off of mid- and small caps over the past five years. A better measure would be pitting VFMF against a portfolio similarly weighted across Vanguard's large-, mid-, and small-cap funds. Vanguard U.S. Multifactor looks even better through that lens, outperforming by more than 5 percentage points annually.

Vanguard Total Bond Market ETF

Style: U.S. intermediate-core bond
Assets under management: $159.8 billion
SEC yield: 4.6%*
Expense ratio: 0.03%, or 30¢ per year for every $1,000 invested

Investors typically look to bonds to add income and relative safety to their portfolios. But bonds come in all shapes and sizes—from U.S. government bonds, to high-quality corporate bonds from top blue-chip companies, to riskier "junk" bonds from borrowers who are facing real challenges to operations. So if you're already confused by the thousands of options in the stock market, looking into bonds on top of that would probably be downright overwhelming.

That's why many investors just opt to buy a bond fund and call it a day.

Vanguard Total Bond Market ETF (BND) is among the best Vanguard ETFs for diversified exposure to most of these categories. BND has a gigantic portfolio of almost 11,500 debt issues, including U.S. Treasury and agency bonds, corporate bonds, even mortgage-backed securities. The portfolio is entirely investment-grade, however—BND doesn't hold "junk" debt"—so you're getting diversification and relatively high credit quality, but not access to greater-yield, higher-potential bonds.

Duration (a measure of interest-rate risk) is 5.8 years, which implies that if market interest rates climbed by 1 percentage point, BND would experience a short-term decline of 5.8%; and if rates dropped by a point, BND would climb by 5.8%.

Bonds don't deliver the quick gains that stocks can. But they offer steady and reliable income—which for many investors is worth the lower potential reward to provide a lower overall risk profile to their portfolio.

* SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

Learn More About These and Other Funds With Morningstar Investor

If you're buying a fund you plan on holding for years (if not forever), you want to know you're making the right selection. And Morningstar Investor can help you do that.

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.

With Morningstar Investor, you'll enjoy a wealth of features, including Morningstar Portfolio X-Ray®, stock and fund watchlists, news and commentary, screeners, and more. And you can try it before you buy it. Right now, Morningstar Investor is offering a free seven-day trial and a discount on your first year's subscription when you use our exclusive link.