The 10 best Vanguard funds to hold for long-term investing (2023)

The 10 best Vanguard funds to hold for long-term investing (1)

Vanguard funds can be good investments for your portfolio if you want to invest for your future. You can choose from a wide variety of high-quality and low-cost mutual funds and exchange-traded funds (ETFs) and buy and hold them for the long term. These characteristics make Vanguard funds ideal choices for a wide variety of investors.

Vanguard offers more than 200 US mutual funds (including variable income portfolios) and more than 220 ancillary funds and ETFs in non-US markets.

Basic takeaways

  • Vanguard is a well-known investment company with a wide range of funds for investors to buy and hold.
  • The best Vanguard funds have low fees that allow you to keep more of your returns.
  • From mutual funds to ETFs and retirement funds, Vanguard is just one place to invest your money for the long term.
  • Returns are never guaranteed, so before you get started, learn the pros and cons of investing with Vanguard and how to choose the best funds for your investment goals.

The 10 Best Vanguard Funds

These are some of the best Vanguard funds to buy and hold, in no particular order. After reviewing the funds, read more about the pros and cons, long-term investing and choosing the right funds for your needs.

Capitalcost ratioMinimal investment
VTSAX0,04%$ 3.000
VWINX0,23%$ 3.000
VFIAX0,04%$ 3.000
VBTLX0,05%$ 3.000
VGSTX0,31%1.000 $
VTIAX0,11%$ 3.000
VIGAX0,05%$ 3.000
VBIAX0,07%$ 3.000
VIMAX0,05%$ 3.000
Objectives of pension fundsDiffersDiffers

Vanguard total stock market index (VTSAX)

Vanguard's VTSAX is a diversified stock index fund. The fund provides exposure to the entire US stock market, including small, mid and large cap stocks. This mix contains more than 4,000 stocks. The expense ratio is 0.04% or $4 for every $10,000 invested. The minimum initial investment is $3,000 for Admiral stock.


Vanguard's VTSAX is also available as an ETF (VTI). The expense ratio for the ETF is 0.03% and the minimum investment is the price of one share.

Vanguard Wellesley Income (VWINX)

VWINX is a balanced fund from Vanguard. It has a conservative (low risk) allocation of approximately 40% equities and 60% bonds. VWINX may be the right choice for long-term investors with somewhat low risk tolerance or retired investors looking for income and growth. The expense ratio for VWINX is 0.23%. The minimum initial investment is $3,000.

Vanguard 500 Index(VFIAX)

This index fund tracks the S&P 500, so it owns about 500 of the largest US stocks. VFIAX shareholders hold positions in stocks such as Apple (AAPL), Meta (META), Amazon (AMZN) and Alphabet (GOOG, GOOGL), Google's parent company.

VFIAX is a smart choice for building a portfolio that includes other stocks, such as small and medium-sized mutual funds. The expense ratio for VFIAX is 0.04%. The minimum initial investment is $3,000.


VFIAX is also available as an ETF (VOO). The expense ratio is 0.03% and the minimum investment is equal to the price of one share.

Vanguard Total Bond Market Index (VBTLX)

Long-term investing is often associated with stocks, but most investors will need to invest part of their portfolio in bonds.

VBTLX is a smart choice for the same reason as most other index funds. They have good differentiation and are cheap. The VBTLX portfolio consists of more than 10,000 US government and corporate bonds. The expense ratio for VBTLX is 0.05%. The minimum initial investment is $3,000.


VBTLX is also available as an ETF. The Vanguard Total Bond Market ETF (BND) has an expense ratio of 0.03%. The minimum investment is equal to the price of one share.

(Video) 12 Best Vanguard Funds To Buy and Hold Forever

Vanguard STAR-fonds (VGSTX)

You may have noticed that you need $3,000 to start investing in most Vanguard funds, but VGSTX has a lower minimum of just $1,000. It is also known as a "fund of funds", meaning it invests in other funds, all in a selection of funds.

The STAR fund invests in a diversified mix of 10 Vanguard funds, making it a solid choice for early-stage investors or those who want a single fund solution. The expense ratio is 0.31%, but Vanguard claims that funds with comparable holdings have an average expense of 0.84%, making the fund cheaper.

Vanguard Total International Stock Market Index (VTIAX)

Most investors will pick upinternational stock exchange fundsto build a full long-term portfolio. VTIAX is one of the best Vanguard funds for this.

VTIAX tracks an index that includes nearly 8,000 non-US stocks. It includes both developed and emerging markets. Shareholders can gain exposure to the entire non-US stock market with an expense ratio of 0.11%. The minimum initial investment is $3,000.


Investors can also choose a cost-per-share index, such as the Vanguard Total International Stock ETF (VXUS), which has a lower expense ratio of 0.07%.

Vanguard Growth Index (VIGAX)

Investors who are willing to take on more risk in exchange for a higher return than the general market indices can take a look at VIGAX. This index fund includes large-cap growth stocks that have historically outperformed the S&P 500, especially over periods of 10 years or more. The costs for VIGAX are 0.05%. The minimum initial investment is $3,000.


VIGAX is also available as a Vanguard Growth ETF (VUG) with an expense ratio of 0.04% and a minimum investment equal to the price of one share.

Vanguard Balanced Index (VBIAX)

Vanguard has a small but very nice selectionbalanced funds— mutual funds or ETFs that invest in stocks and bonds. VBINX has a moderate (medium risk) allocation of approximately 60% equities and 40% bonds. The equity component invests in a general stock market index. The bond segment invests in a general bond index. The costs are 0.07%. The minimum initial investment is $3,000.

Vanguard Mid-Cap Index (VIMAX)

Historically, small-cap and mid-cap stocks have outperformed large-cap stocks over the long term, but mid-cap stocks may be the wisest choice of the three. While mid-cap stocks generally have higher market risk, they tend to have lower risk than small-cap stocks.

Investors often consider midcaps to be the ideal place to invest because of their return relative to risk. VIMAX has a low expense ratio of 0.05%. The minimum initial investment is $3,000.


The same mix is ​​also available as the Vanguard Mid-Cap ETF (VO), with an expense ratio of 0.04% and a minimum initial investment equal to the price of one share.

Vanguard Target Pension Funds

There are severalVanguard Target Pension Fundschoose from. Some investors would be wise to consider this unique type of investment. As the name suggests, the strategy of these funds is focused on the fund-specific target retirement year.

For example, Vanguard Target Retirement2040 (VFORX) has an asset allocation of approximately 80% stocks and 20% bonds across four Vanguard funds, which is just right for an investor who will retire by the year 2040. It has an expense ratio of 0.08% and minimum investment of $1,000.If you don't retire until 2065, Vanguard Target Retirement2065 (VLXVX) may be a better fit. It consists of four other Vanguard funds, with an expense ratio of 0.08% and a minimum investment of $1,000.


Vanguard's Target Retirement Funds are good choices for investors who want to buy and hold a mutual fund until retirement. Some planners call these funds "set and forget" because you don't need to build a portfolio of funds or manage a portfolio.

Pros and Cons of Vanguard Funds

There are some pros and cons to investing in Vanguard mutual funds, but that's the case with any mutual fund.


  • Low-cost mutual funds with the ability to mimic the performance of a specific market index

  • Bond funds and international equity funds can provide a good diversification

  • Many mutual funds are also available as ETFs with a lower minimum investment requirement


  • With long-term investing, you leave your money in the account for years

  • Due to the large number of chapters you will have to do more research

  • Many funds require a minimum investment of $3,000

(Video) 5 Best Vanguard Funds to Buy & Hold Forever

Are you a long-term investor?

Decide if you are a long-term investor before buying Vanguard funds.

You can hear 10 different explanations of what "long term" means if you talk to 10 different financial planners. You would be long term if you have at least 10 years before you need to start withdrawing money from your accounts. This also applies to long-term bonds and long-term bond funds.


If you want to save for a future purchase, such as a car or a home, investing in long-term funds may not be the right strategy. Think about other thingsinvestments in the short termand savings products such ascertificates of deposit (CD).

Retired investors can make the common mistake of thinking of themselves as "short-term" investors. They can withdraw money to increase their retirement income, but they could easily have at least 10 years extra life expectancy. The average life expectancy in the US is 77 years.

You would still have 12 years to invest if you retired at 65 and turned 77. Depending on your sources of income and your overall financial picture, you should invest at least a portion of your retirement assets in long-term investments, which may include equity funds.

Choosing the right funds for your needs

The best long-term investments generally consist of equity funds, especially index funds.


Equity funds can be a good option if you have at least three years before you begin withdrawals.

Index funds also make smart choices for long-term investments. of the Vanguardindex fundsare among the top picks for long-term investors. They have attracted such a large number of assets that Vanguard has become the largest mutual fund in the world.

Vanguard index funds make smart long-term investment choices because index funds arepassively managed. They have bearingcost ratio'svanactively managed funds. They also offer a long-term performance advantage because their expense ratios are so low. This is because most active fund managers do not outperform major market indices for more than 10 years.

(Video) 5 Best ETFs To Buy And Hold Forever In A Roth IRA & HSA

You can also invest in funds that match the market for a lower cost, rather than trying to beat the market. It is very difficult to consistently beat the market over the long term.

Frequently Asked Questions (FAQ)

What Are the Best Vanguard Funds for Retirees?

The best Vanguard funds for retirees depend on age and risk tolerance. This means the best fund could be a balance or income fund if you're younger, or a bond or income fundmutual fundwhen you are older.

Which Vanguard mutual fund will have the best capital gains?

In general, the higher the risk, the greater the chancecapital gains. If you're comparing two equity funds, you may have a higher chance of capital gains with growth or small-cap funds than with dividend or blue-chip funds. Keep in mind that the opportunity for capital gains also exposes you to potential capital losses.

Balance does not provide tax, investment or financial services and advice. The information is presented without regard to any particular investor's investment objectives, risk tolerance or financial circumstances and may not be appropriate for all investors. Past performance is not an indication of future results. Investing involves risks, including possible loss of capital.

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The Balance uses only high-quality sources, including peer-reviewed studies, to back up the facts in our articles. Read ourseditorial processto learn more about how we monitor our content and keep it accurate, reliable and trustworthy.

  1. Forefront. "Facts and numbers."

  2. Forefront. "Vanguard Total Stock Market Index Fund Admiral Shares."

  3. Forefront. "Vanguard Total Stock Market ETF (VTI)."

  4. Forefront. "Vanguard Wellesley Income Fund Investor Shares (VWINX)."

  5. Forefront. "Vanguard 500 Index Fund Admiral Shares (VFIAX)."

  6. Forefront. "Vanguard S&P 500 ETF (VOO)."

  7. Forefront. "Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)"

  8. Forefront. "Vanguard Total Bond Market ETF (BND)."

  9. Forefront. "Vanguard STAR-fonds (VGSTX)."

  10. Forefront. "Vanguard Total International Stock Market Index (VTIAX)."

  11. Forefront. "Vanguard Total International Stock ETF (VXUS)."

  12. Forefront. "Vanguard Growth Index Fund Admiral Shares (VIGAX)."

  13. Forefront. "Vanguard Growth ETF (VUG)."

  14. Forefront. "Vanguard Balanced Index Fund Admiral-aandelen (VBIAX)."

  15. Forefront. "Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX)."

  16. Forefront. "Vanguard Mid-Cap ETF (VO)."

  17. Forefront. "Vanguard Target Pensioenfonds 2040 (VFORX)."

  18. Forefront. "Vanguard Target Pension Fund 2065."

  19. Center for Disease Control and Prevention. "Life expectancy."

    (Video) 5 Best Vanguard ETFs to Buy and Hold Forever

  20. "Index Funds."

(Video) 5 Vanguard Funds Ranked for Highest Return


The 10 best Vanguard funds to hold for long-term investing? ›

Look for funds that have expense ratios below 1 percent. If you can handle the $3,000 minimum initial investment, I like the low-cost Vanguard Total Stock Market Index Fund and the Vanguard Total International Stock Index Fund (; 877-662-7447).

What Vanguard Fund does Suze Orman recommend? ›

Look for funds that have expense ratios below 1 percent. If you can handle the $3,000 minimum initial investment, I like the low-cost Vanguard Total Stock Market Index Fund and the Vanguard Total International Stock Index Fund (; 877-662-7447).

What is the safest Vanguard investment? ›

Of the 3 main asset classes, cash is the safest, followed by bonds and then stocks. Safer investments also have lower average returns.

What is the highest growth Vanguard fund? ›

The fastest growing fund managed by U.S. asset management company Vanguard is the Vanguard Energy Index Fund. Over the year to January 16, 2023, the ETF generated an annual return of 44.19 percent. Vanguard's fastest growing mutual fund was also the Vanguard Energy Index Fund, which grew by 38.4 percent.

Which fund has the highest 10 year return? ›

Aditya Birla Sun Life Corporate Bond-
NameDividend Yield 1 yearDividend Yield 10 years
Nippon India Large Cap16.82%11.59%
SBI Magnum MidCap21.90%10.1%
Kotak Small Cap25.50%15.85%
HDFC Banking & PSU Debt Fund6.37%7.61%
2 more rows
May 25, 2023

Do millionaires use Vanguard? ›

The median household in the study has over $1 million with Vanguard and those below the median have assets outside of Vanguard (i.e. real estate, non-Vanguard accounts, etc.) that make most of them millionaires as well.

What investments does Suze Orman recommend? ›

Your investment portfolio should have a good mix of stocks and bonds and include low-cost index mutual funds or ETFs, Orman wrote in a blog post. Once you have the right mix, there's nothing you should do aside from contributing regularly and reviewing your portfolio annually.

What is the safest investment with the highest return? ›

High-quality bonds and fixed-indexed annuities are often considered the safest investments with the highest returns. However, there are many different types of bond funds and annuities, each with risks and rewards. For example, government bonds are generally more stable than corporate bonds based on past performance.

Is it safe to put all my money in Vanguard? ›

Money market funds and other securities held in the Vanguard Brokerage Account are eligible for SIPC coverage. Securities in your brokerage account are protected up to $500,000. To learn more, visit the SIPC's website. Up to $250,000 by FDIC insurance.

Which is best Vanguard fund? ›

  • Vanguard Target Retirement 2065 Fund (VLXVX)
  • Vanguard Wellington Fund Admiral Shares (VWENX)
  • Vanguard S&P 500 ETF (VOO)
  • Vanguard Total Stock Market ETF (VTI)
  • Vanguard Total Bond Market Index Fund ETF (BND)
  • Vanguard Total International Stock ETF (VXUS)
  • Vanguard Total World Stock Index Fund Admiral Shares (VTWAX)
4 days ago

Are Vanguard funds better than Fidelity? ›

Bottom Line. Overall, Vanguard and Fidelity are both great choices for those interested in investing. They offer a wide range of investment options, low costs, and hands-off or active management depending on your preference. When it comes to index funds, Vanguard is hard to beat, with hundreds of low-cost options.

Should I keep money in my settlement fund Vanguard? ›

While you're not required to have a balance in your settlement fund at all times, keeping some money in the settlement fund has these advantages: You're more likely to have money to pay for purchases on the settlement date, when your account will be debited for the amount you owe.

Which fund is better T Rowe Price or Vanguard? ›

Rowe Price offers functional news and marketing information. Vanguard does not offer real-time streaming news, but does offer news articles. Overall, T. Rowe Price has a small edge over Vanguard for their overall account and research amenities offerings.

What type of fund is Vanguard target retirement? ›

Vanguard offers target-date retirement funds to suit the needs of investors of various ages. A target-date fund is a mutual fund that automatically adjusts the asset mix and allocation over a time period that's based on your age and when you want to retire. The information in this article is current as of July 3, 2021.


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