6 Must-Have Vanguard Mutual Funds To Invest In

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Explore the best Vanguard mutual funds to invest in now. Find top-performing funds to help diversify your portfolio and achieve your long-term financial goals. (search description)

There are trillions of U.S. dollars invested in Vanguard funds. Are any of them yours? Whether you are looking to start your investing journey or diversify your holdings, Vanguard likely has a suitable mutual fund option. Meet six of the most popular Vanguard funds across different investing styles below.

Why Choose Vanguard For Mutual Funds?

Vanguard is a trusted name in investing, particularly if you prefer low-cost, low-maintenance funds. John Bogle, Vanguard’s founder, created the world’s first index fund—giving investors, for the first time, easy access to broadly diversified portfolios. Since then, Vanguard has developed a full catalog of mutual funds that investors love.

Another differentiating point is the company’s ownership structure. Vanguard Group is owned by its funds, which in turn are owned by shareholders. This creates alignment between the goals of the company and the investors it serves.

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Types of Vanguard Mutual Funds

Vanguard has more than 250 mutual funds, spread across equity, bond and balanced investing strategies.

Equity Funds

Equity funds invest in stocks, which are ownership positions. Publicly traded stocks fluctuate in value based on supply and demand. They offer nice appreciation potential but come with the risk of loss.

Even so, equity investing is suitable for most investors. Those with a low tolerance for risk can balance their equity holdings with a similarly sized position in bonds.

Bond Funds

Bond funds invest in debt issued by governments, agencies or corporations. The funds can be broadly diversified or they can specialize in an issuer type, a maturity range or a country or region of issuance.

Bonds do not appreciate the way stocks do, but they do pay interest. While their values can rise or fall based on interest rate trends, bonds are typically stable. They are suitable for investors who prefer income and stability over growth with volatility.

Most investors hold stocks and bonds together in a portfolio. The relative amounts of each asset class will depend on the investor’s priorities and risk tolerance. A higher bond allocation is appropriate for risk-averse investors, while larger stock exposure suits those seeking strong growth.

Balanced Funds

Balanced funds hold set allocations of stocks and bonds. A common allocation is 60% stocks and 40% bonds. This combination provides steady growth potential with regular income.

Balanced funds are ideal for investors who want to hold as few positions as possible. As long as the investor accepts the targeted allocation, no other positions are necessary.

6 Best Vanguard Mutual Funds

The table below introduces six Vanguard mutual funds that hold stocks, bonds or a combination of both. All are passively managed index funds with low expense ratios. See index and mutual fund differences for more information.

Table data source: Vanguard.

All six mutual funds require a minimum investment of $3,000. If you are working with a smaller budget, see our picks for Vanguard ETFs instead. Or, to learn about fund options from other families, see Fidelity mutual funds and Charles Schwab mutual funds.

1. Total Stock Market Index Fund Admiral Shares (VTSAX)

Price: $144.38
Expense ratio: 0.04%
Minimum investment: $3,000
SEC 30-day yield: 1.2%
5-year average annual return: 14.5%

Total Stock Market Index Fund Admiral Shares Overview

The Vanguard total stock market fund replicates the performance of the entire U.S. stock market. Holdings include small, mid and large-cap stocks across growth and value investing styles.

Why VTSAX Mutual Fund Is A Top Choice

VTSAX is one of Vanguard’s most popular funds, and for good reason. With a low expense ratio of 0.04%, the fund provides cost-efficient access to more than 3,500 U.S. stocks. And, since the holdings are weighted by market capitalization, the portfolio is continually increasing exposure to its fastest-growing stocks. The largest holdings are Apple, Nvidia and Microsoft.

2. 500 Index Fund Admiral Shares (VFIAX)

Price: $551.84
Expense ratio: 0.04%
Minimum investment: $3,000
SEC 30-day yield: 1.2%
5-year average annual return: 15.2%

500 Index Fund Admiral Shares Overview

Vanguard 500 Index Fund tracks the S&P 500. The S&P 500 includes the 500 largest and most established publicly traded U.S. companies. These large-caps account for roughly 80% of the value in the U.S. stock market.

Why VFIAX Mutual Fund Is A Top Choice

There are many low-cost S&P 500 funds and ETFs, because this is a popular market segment to use as a core portfolio holding. Even better, the index has outperformed the broader stock market over the last two years on the strength of mega-cap tech stocks like Nvidia and Microsoft.

Vanguard’s S&P 500 fund is not the cheapest available, but the 0.04% expense ratio is competitive. Notably, the fund’s tracking error—or the difference between the returns of the index and the fund—is consistently equal to the expense ratio. This is a good sign. A tracking error that is much higher than the expense ratio signals the fund is not well managed.

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3. High Dividend Yield Index Fund Admiral Shares (VHYAX)

Price: $40.30
Expense ratio: 0.08%
Minimum investment: $3,000
SEC 30-day yield: 2.6%
5-year average annual return: 10.8%

High Dividend Yield Index Fund Admiral Shares Overview

Vanguard’s high dividend yield fund invests in stocks that pay above-average dividends. There are about 530 U.S. stocks in the portfolio with exposure across all sectors. Top holdings include semiconductor company Broadcom, financial services company JPMorgan Chase and oil and gas powerhouse ExxonMobil.

Why VHYAX Mutual Fund Is A Top Choice

The 2.6% dividend yield of VHYAX is twice the yield of the S&P 500. Alongside the competitive yield, the fund also offers moderate appreciation potential. The stocks in the portfolio lean towards value characteristics—they show steady growth, generate a lot of cash and are insulated by competitive advantages. This fund may underperform in hot markets, but it should prove its worth with lesser downside when stock prices are falling.

4. Total Bond Market Index Fund Admiral Shares (VBTLX)

Price: $9.55
Expense ratio: 0.05%
Minimum investment: $3,000
SEC 30-day yield: 4.4%
5-year average annual return: -0.2%

Total Bond Market Index Fund Admiral Shares Overview

Vanguard’s total bond market index fund provides exposure to U.S. investment-grade bonds of varying maturities. The portfolio includes U.S. Treasury debt, mortgage-backed securities and corporate debt.

Why VBTLX Mutual Fund Is A Top Choice

VBTLX is a popular core choice among risk-averse income investors. The fund also makes a nice diversification partner to equity funds. Pairing this low-risk, investment-grade debt portfolio with, say, an S&P 500 fund is a common strategy. The outcome is a portfolio that shows less volatility than the overall market.

5. Total International Bond Index Fund Admiral Shares (VTABX)

Price: $20.02
Expense ratio: 0.11%
Minimum investment: $3,000
SEC 30-day yield: 2.8%
5-year average annual return: -0.2%

Total International Bond Index Fund Admiral Shares Overview

Vanguard’s international bond index fund invests in a broad portfolio of non-U.S. investment-grade bonds. The portfolio includes debt from issuers in Europe, the Pacific, North America, Emerging Markets and Middle East. Most (72.5%) of the securities have maturities of 10 years or less.

Why VTABX Mutual Fund Is A Top Choice

VTABX is a diversification play. A small slice of exposure to international bonds can be a nice protection against a U.S. economic downturn. This is why Vanguard’s lifecycle funds designed for 2025 retirees have 12.7% exposure to international bonds.

VTABX’s yield is less than Vanguard’s U.S. bond fund, but the five-year average annual return is the same.

6. Balanced Index Fund Admiral Shares (VBIAX)

Price: $50.74
Expense ratio: 0.07%
Minimum investment: $3,000
SEC 30-day yield: 2.4%
5-year average annual return: 8.7%

Balanced Index Fund Admiral Shares Overview

Vanguard’s balanced fund maintains an allocation of 60% stocks and 40% bonds. For each class, the portfolio has broad exposure across the U.S. market. The fund is comparable to holding a 60/40 split of Vanguard’s total U.S. stock market fund and Vanguard’s total U.S. bond market fund.

Why VBIAX Mutual Fund Is A Top Choice

VBIAX is a one-stop shop fund that requires no other holdings and no rebalancing. With a 60/40 ratio between stocks and bonds, this fund provides moderate growth potential without extreme volatility. Heavy diversification means that no single position risks the performance of the group.

The fund’s top equity holdings are familiar names: Apple, Nvidia, Microsoft and Amazon. Additionally, the fund’s bond positions are heavily weighted to U.S. government issues.

Bottom Line

Vanguard mutual funds can round out your investing exposure across asset classes and geographies. Or, this fund family can be the sole player in your portfolio with one or two positions. Whatever your approach, there is probably a role for low-cost index funds— Vanguard’s specialty—in your investing journey.

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