Here are the best Vanguard ETFs to invest in 2021 for long-term growth. ETFs (Exchange-Traded Funds) are among our favorite investments because they can be traded easily, and they are classified in different asset compositions.
If you are holding some ETFs in your portfolio and are interested to invest in Vanguard ETF soon, we gathered the best Vanguard ETFs to buy and hold for long term.
If you are a newbie investor of exchange-traded funds, don’t worry because we made this page to guide beginner investors, as well. It’s not too late to start to buy some shares in 2021.
There are over 76 Vanguard ETFs, but we have selected the best 18 ETFs we believe are suitable for investors aiming to grow their capital with a long-term perspective in mind.
Benefits of Investing in Vanguard ETF
Topnotch Fund Management
Vanguard is one of the world’s largest investment firms and among the most successful fund management companies. Their proven expertise continues to run excellent performing funds every year. Vanguard has over $7.2 trillion in global assets under management in 2021.
Outstanding Fund Performance
When it comes to fund performance, Vanguard consistently produces high-performing managed funds.
According to Lipper, “for the three-year period ended June 30, 2021, 7 of 7 Vanguard money market funds, 88 of 111 bond funds, 34 of 43 balanced funds, and 134 of 209 stock funds (in total, 263 of 370 Vanguard funds) outperformed the average return of their peer group.
For the five-year period ended June 30, 2021, 7 of 7 Vanguard money market funds, 83 of 109 bond funds, 31 of 37 balanced funds, and 125 of 201 stock funds (in total, 246 of 354 Vanguard funds) outperformed the average return of their peer group.
For the ten-year period ended June 30, 2021, 7 of 7 Vanguard money market funds, 67 of 82 bond funds, 21 of 24 balanced funds, and 149 of 178 stock funds (in total, 244 of 291 Vanguard funds) outperformed the average return of their peer group.”
Exchange-traded funds are a basket of different assets such as bonds, stocks, commodities, or other securities. ETF can mimic a specific stock market index.
Likewise, it can also compose equities in a particular sector like real estate, financial, health care, emerging markets, or the energy sector.
You are already diversifying your capital when you invest in ETF because it’s a basket of numerous assets. It’s also beneficial and less risky compared to spending your money buying an individual stock.
Many investors also prefer Vanguard ETFs for their lower cost incentive. It’s 83% lower than the average.
According to Morningstar, “based on the 2020 US mutual fund industry asset-weighted average expense ratio of 0.54%, Vanguard’s corresponding average expense ratio is only 0.09%.”
Ease of Trading
Nowadays, ETFs can be traded like stocks. You can buy your chosen ETF on any trading day.
Unlike mutual funds, where you have to wait for the NAVPS (Net Asset Value Per Share) price for the day before you can buy your shares, ETFs are easier to purchase.
How to Invest in Vanguard ETF?
- Open your investment account
- Select the ETF suitable for your goals
- Buy shares of your chosen ETF
- Hold your ETF until your target period or target price
- Sell your shares for a profit
Best Vanguard ETFs to Invest in 2021 for Long Term Growth
1. Vanguard Information Technology ETF (VGT)
Vanguard Information Technology ETF is a weighted index that invests in the information technology sector. Unlike the NASDAQ 100 index, VGT includes credit card companies like Visa and Mastercard. It also has higher percentage of small and micro-cap tech companies.
VGT ETF holds 358 technology companies. Their top holdings include Apple, Microsoft, NVIDIA, Visa, PayPal, Adobe, and Mastercard. The ETF pays dividends every quarter of the year. It’s one of the best performing Vanguard ETFs.
- VGT 3-Year Total Return: 121.25%
- VGT Expense Ratio: 0.10%
Why should you invest in Vanguard Information Technology ETF?
Because you want to invest in large and small-cap tech companies, and you wish to receive dividends frequently, too. You also understand the high risk and high-income potential of VGT, focusing on the technology, financials, industrial, and communication sectors.
2. Vanguard Real Estate ETF (VNQ)
Vanguard Real Estate ETF attempts to track the performance of the MSCI REIT index to deliver a decent level of income and capital appreciation. It is suitable for moderate to long-term investment.
VNQ ETF invests in 176 stocks involved with real estate. Vanguard Real Estate II Index Fund, American Tower Corp., Prologis, Crown Castle International Corp., Equinix Inc. are among their largest holdings.
- VNQ 3-Year Total Return: 43.93%
- VNQ Expense Ratio: 0.12%
Why should you invest in Vanguard REIT ETF?
If you want to allocate some of your funds to Real Estate Investment Trust (REIT) companies in one basket, then consider adding some shares of VNQ.
REITs offer growth potential because they reward dividends to shareholders. The real estate industry also has an excellent track record.
3. Vanguard S&P 500 ETF (VOO)
Vanguard S&P 500 ETF is an exchange-traded fund that replicates the performance of the S&P 500 index, which is often used as a benchmark for stocks in the United States. The index has most of the largest companies in the USA.
- VOO 3-Year Total Return: 65.37%
- VOO Expense Ratio: 0.03%
Why should you invest in Vanguard S&P 500 ETF?
Because you want to copy the performance of the S&P 500 index. Investing in VOO ETF is also more affordable than buying shares of the S&P 500 index. VOO is loved by investors looking for the best Vanguard ETF for retirement because of its potential and cheap expense ratio.
4. Vanguard S&P 500 Growth ETF (VOOG)
Vanguard S&P 500 Growth ETF also mimics the performance of the S&P 500 index like VOO ETF, but VOOG focuses on growth stocks. The ETF invests in 240 stocks and has a slightly higher expense ratio than VOO but is still cheaper than other ETFs.
- VOOG 3-Year Total Return: 84.70%
- VOOG Expense Ratio: 0.10%
Why should you invest in Vanguard S&P 500 Growth ETF?
Because you prefer to benchmark the performance of the S&P 500 index, and you want to focus on growth stocks of large-cap companies. VOOG ETF has an upward trend and pays dividends regularly. It is one of the best Vanguard ETFs in 2021.
5. Vanguard Total Stock Market ETF (VTI)
Vanguard Total Stock Market ETF is a passively managed ETF that replicates the performance of the CRSP US Total Market Index. VTI invests in more than 3900 US equities (large, mid, and small-cap) diversified across value and growth strategies.
VTI is one of the most wanted ETFs in the world because of its low expense ratio, just 0.03%. So, if you’re looking for the best Vanguard ETF to buy right now, consider having VTI in your portfolio.
- VTI 3-Year Total Return: 65.17%
- VTI Expense Ratio: 0.03%
Why should you invest in Vanguard Total Stock Market ETF?
Because VTI is composed of a brilliant blend of large, mid, and small-cap companies. With a cheap expense ratio, you can attain profitable potential. Despite the considerable risk and market volatility, VTI remains on a rising trend over the years.
6. Vanguard Total World Stock ETF (VT)
Vanguard Total World Stock ETF follows the performance of the FTSE Global All-Cap Index, which invests in both emerging markets and still-developing companies worldwide. It is appropriate for investors seeking capital growth with a high-risk tolerance.
The fund holds 9084 stocks, including Apple, Microsoft, Facebook, Alphabet, Tesla, NVIDIA, JPMorgan Chase & Co., Tencent, and many more.
- VT 3-Year Total Return: 50.22%
- VT Expense Ratio: 0.08%
Why should you invest in Vanguard Total World Stock ETF?
Because you want to invest in both international and US stocks from well-established and still-emerging companies worldwide. VT is among the best international Vanguard ETFs to have for global stocks investors.
7. Vanguard Total International Stock ETF (VXUS)
Vanguard Total International Stock ETF is an exchange-traded fund that tracks the FTSE Global All-Cap index except the US index. It is also known as VXUS. VXUS has wide exposure across highly developed and emerging markets, excluding the US market.
VXUS has around 7541 holdings. Their top stocks include Taiwan Semiconductor Manufacturing Co., Tencent Holdings, Alibaba Group, Nestle, Samsung Electronics, ASML Holding, Roche Holding, Toyota Motor Corp., LVMH (Moet Hennessy Louis Vuitton), and Novartis.
- VXUS 3-Year Total Return: 32.24%
- VXUS Expense Ratio: 0.08%
Why should you invest in Vanguard Total International Stock ETF?
Because you are interested in investing in global companies outside the USA, you like to be exposed to emerging markets across Europe, the Pacific, the Middle East, and North America. Besides, you are confident with the investment return of VXUS ETF.
8. Vanguard Small-Cap Value ETF (VBR)
Vanguard Small-Cap Value ETF is an ETF that tracks the performance of the CRSP US Small Cap Value Index, which measures the investment return of a diversified group of small value companies.
VBR ETF has more than 950 holdings. Among their top holdings are Diamondback Energy, IDEX Corp., VICI Properties, Nuance Communications, Molina Healthcare, Signature Bank, and Novavax.
- VBR 3-Year Total Return: 32.09%
- VBR Expense Ratio: 0.07%
Why should you invest in Vanguard Small-Cap Value ETF?
Because you are into value investing and you believe that big things start from small beginnings. The securities in VBR are chosen in terms of value and growth factors. VBR also pays dividends every quarter.
9. Vanguard Small-Cap 600 Growth ETF (VIOG)
Vanguard Small-Cap 600 Growth ETF is an ETF that mimics the investment return of the S&P Small-Cap 600 Growth Index, which consists of small-cap growth stocks. It’s suitable for aggressive investors looking to grow their capital in long term.
- VIOG 3-Year Total Return: 37.83%
- VIOG Expense Ratio: 0.15%
Why should you invest in Vanguard Small-Cap 600 Growth ETF?
Because you want to benchmark the result of the S&P Small-Cap 600 Growth Index. Also, you don’t want to concentrate the chance and risk by only investing in large-cap companies. So, you want to have allocation for small-cap stocks as well.
10. Vanguard International High Dividend Yield ETF (VYMI)
Vanguard International High Dividend Yield ETF is a passively managed fund that copies the performance of the FTSE All-World ex US High Dividend Yield Index. It focuses on developed and emerging markets outside the USA and companies that have higher-than-average dividend yields.
The fund invests in more than 1000 stocks in Europe, the Pacific, Middle East, and North America in the financials, energy consumer, health care, and industrial sectors.
- VYMI 3-Year Total Return: 23.01%
- VYMI Expense Ratio: 0.28%
Why should you invest in Vanguard International High Dividend Yield ETF?
Because you prefer high-dividend yield stocks, and you want to explore your opportunity with emerging markets outside the United States. VYMI has a dividend yield of 3.45% (trailing 12-months).
11. Vanguard Russell 1000 Growth ETF (VONG)
Vanguard Russell 1000 Growth ETF aims to imitate the performance of the Russell 1000 Growth Index, which invests in growth stocks of US companies with large market capitalization. The fund holds over 500 US equities.
- VONG 3-Year Total Return: 93.32%
- VONG Expense Ratio: 0.08%
Why should you invest in Vanguard Russell 1000 Growth ETF?
Because you are very confident with large-cap growth stocks and their ability to prosper for long term. You also like the breakdown of investment in the technology, consumer cyclical, financials, communication, health care, real estate, energy, consumer defensive, and utilities.
12. Vanguard Russell 2000 Growth ETF (VTWG)
Vanguard Russell 2000 Growth ETF tracks the Russell 2000 Growth Index, a benchmark of small-cap growth stocks in the United States. It holds over 1220 US stocks and is among the best small-cap Vanguard ETFs.
- VTWG 3-Year Total Return: 45.59%
- VTWG Expense Ratio: 0.15%
Why should you invest in Vanguard Russell 2000 Growth ETF?
Because you want to take the risk of investing in small-cap US companies and the prospect of earning higher income than bonds and other managed funds in the stock market.
13. Vanguard FTSE Europe ETF (VGK)
Vanguard FTSE Europe ETF is a passively managed ETF that replicates the performance of the FTSE Developed Europe All Cap Index. It is a basket of over 1300 stocks across Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
- VGK 3-Year Total Return: 35.43%
- VGK Expense Ratio: 0.08%
Why should you invest in Vanguard FTSE Europe ETF?
Because you want to have investment coverage in European value and growth companies. You also have a strong conviction that European stocks can deliver high-income potential when invested for long term.
14. Vanguard Consumer Discretionary ETF (VCR)
Vanguard Consumer Discretionary ETF tracks the investment performance of MSCI US Investable Market Index (IMI) Consumer Discretionary 25/50. It concentrates on small, mid, and large-cap companies within the consumer discretionary sector.
VCR invests in 298 consumer-centric stocks. Its top holdings include Amazon, Home Depot, Nike, McDonald’s, Lowe’s Companies, Starbucks, Target, Booking Holdings, and many more.
- VCR 3-Year Total Return: 89.32%
- VCR Expense Ratio: 0.10%
Why should you invest in Vanguard Consumer Discretionary ETF?
Because you want to diversify your portfolio and want to allocate some funds to consumer discretionary stocks. You also understand that the market is unpredictable and has some downturns, yet consumers’ needs will always be present.
15. Vanguard Communication Services ETF (VOX)
Vanguard Communication Services ETF is a passively managed fund that follows the performance of MSCI US Investable Market Index (IMI) Communication Services 25/50.
VOX focuses on companies that provide integrated and wireless telecommunication services, cable and satellite, interactive media, movies and entertainment, publishing, advertising, and broadcasting services.
The fund’s top holdings include Facebook, Alphabet, The Walt Disney Co., Netflix, Comcast, Verizon, AT&T, Charter Communications, T-Mobile, and many more stocks within the communication industry.
- VOX 3-Year Total Return: 71.86%
- VOX Expense Ratio: 0.10%
Why should you invest in Vanguard Communication Services ETF?
Because we need to stay connected with our loved ones and the world. Communication companies will continuously evolve. VOX includes many high-profile growth stocks that you believe will stay relevant even in the years to come.
16. Vanguard Health Care ETF (VHT)
Vanguard Health Care ETF tracks the investment return of MSCI US Investable Market Index (IMI) Health Care 25/50. VHT is composed of small, mid-size, and large companies within the health care sector.
Vanguard Health Care ETF has more than 500 health care companies, including Johnson & Johnson, UnitedHealth Group, Pfizer, Abbott Laboratories, AbbVie, Thermo Fisher Scientific, Merck, Eli Lilly, Danaher, and many more.
- VHT 3-Year Total Return: 58.29%
- VHT Expense Ratio: 0.10%
Why should you invest in Vanguard Health Care ETF?
Because you believe that health is wealth. VHT is a well-diversified health-focused investment. Even if medical stocks are very volatile, you still want to allocate a portion of your portfolio to participate in the health care revolution.
17. Vanguard Financials ETF (VFH)
Vanguard Financials ETF aims to track the performance of MSCI US Investable Market Index (IMI) Financials 25/50, which invests in companies that provide financial services. It is among the best financial ETFs in the world.
VFH’s top holdings include JPMorgan Chase, Berkshire Hathaway, Bank of America, Wells Fargo, Citigroup, BlackRock, Goldman Sachs, Morgan Stanley, American Express, Charles Schwab, and many more.
- VFH 3-Year Total Return: 43.33%
- VFH Expense Ratio: 0.10%
Why should you invest in Vanguard Financials ETF?
Because you trust the upside potential of VFH and you want to position some parts of your portfolio in the financial sector. Many of VFH’s holdings are exceptional companies and are well-positioned to beat the market.
18. Vanguard Mega Cap Growth ETF (MGK)
Vanguard Mega Cap Growth ETF is a passively managed fund that imitates the performance of the CRSP US Mega Cap Growth Index. Mega Cap companies are giant companies. According to Investopedia, “mega cap refers to companies with a market capitalization above $200 billion.”
MGK holds more than 100 of the most significant growth stocks in the US market. Its top holdings include Apple, Microsoft, Amazon, Facebook, Alphabet, Tesla, NVIDIA, Visa, and PayPal.
- MGK 3-Year Total Return: 98.87%
- MGK Expense Ratio: 0.07%
Why should you invest in Vanguard Mega Cap Growth ETF?
Because you believe that mega-cap companies constantly deliver solid returns when invested for long term. MGK also outperformed the S&P 500 and small caps companies many times. You think that it will continue to do the same.
With an expense ratio of 0.07%, MGK is definitely among the best Vanguard ETFs to invest in 2021.
Disclaimer: This article is for information purposes only and should not be considered as professional advice. Past performance is not a guarantee of future results. All investments have risks. Always do your research before investing.