Vanguard ETFs: 9 Best Funds To Buy In 2025
Discover the top Vanguard ETFs for low-cost investing and building wealth with minimal fees.
9 Best Vanguard ETFs to Buy in 2025
Vanguard has established itself as a leader in low-cost investing, offering investors access to thousands of exchange-traded funds (ETFs) and mutual funds with some of the lowest expense ratios in the industry. According to Vanguard’s analysis, the average Vanguard mutual fund and ETF expense ratio is 82% lower than the industry average today. This means that over a 30-year period, investors can save an estimated $30,042 in fees on an initial investment of just $50,000 compared to investing with firms charging industry-average fees.
All Vanguard ETFs trade commission-free, none have front- or back-end loads, and none require round-number minimum investments—you simply need sufficient funds to purchase at least one whole share. Most ETF expense ratios are 0.15% or less, with many being significantly lower. This article explores nine of the best Vanguard ETFs to consider adding to your investment portfolio in 2025.
1. Vanguard Total Stock Market ETF (VTI)
Expense Ratio: 0.03% | One-Year Return: 24.04% | Five-Year Return: 15.58% | Ten-Year Return: 12.58% | Risk Potential: 5
The Vanguard Total Stock Market ETF is designed to match the performance of a broad swathe of equities—specifically, the CRSP U.S. Total Market Index. This index includes a mix of small-, mid-, and large-cap growth and value stocks, providing comprehensive exposure to the entire U.S. stock market. VTI is an excellent choice for investors seeking broad market exposure without the need to pick individual stocks.
With its incredibly low expense ratio of just 0.03%, VTI is one of the most cost-effective ways to gain diversified exposure to the American equity market. The ETF version may be a better fit for investors who can’t meet the $3,000 mutual fund minimum required for the traditional mutual fund version. VTI’s composition spans virtually every sector of the U.S. economy, making it a cornerstone holding for many passive investors.
2. Vanguard Total Bond Market ETF (BND)
Expense Ratio: 0.035% | Five-Year Return: 4.35% | Dividend Yield: 2.48% | Risk Potential: 2
The Vanguard Total Bond Market ETF provides exposure to the broad U.S. bond market, holding over 10,005 bonds with total net assets exceeding $298 billion. BND is diversified across U.S. government bonds (59.4%) and corporate bonds (40.6%), with corporate bond components also diversified by credit quality. This diversification helps reduce credit risk while maintaining a steady income stream.
BND is an ideal choice for investors seeking to balance their equity holdings with fixed-income exposure. The fund’s low expense ratio and substantial dividend yield make it an excellent option for generating income while preserving capital. With a risk potential score of just 2 out of 5, BND offers relative stability compared to stock-focused ETFs, making it suitable for conservative portfolios or those nearing retirement.
3. Vanguard Total International Stock ETF (VXUS)
Expense Ratio: 0.08% | Five-Year Return: 8.34% | Dividend Yield: 2.16% | Risk Potential: 5
The Vanguard Total International Stock ETF tracks the performance of the FTSE Global All Cap ex U.S. Index, which matches the performance of a broad basket of companies based outside the United States. VXUS provides exposure to both developed and emerging markets, limiting regional risk and ensuring access to high- and low-growth economies alike.
International diversification is crucial for a well-rounded investment portfolio. VXUS complements domestic holdings like VTI, allowing investors to capture global growth opportunities. The fund’s component firms span multiple continents and market categories, from mature economies like Japan and Germany to emerging markets such as India and Brazil. With a very reasonable expense ratio of 0.08%, VXUS makes international investing accessible and affordable for all investors.
4. Vanguard S&P 500 ETF (VOO)
Expense Ratio: 0.03% | One-Year Return: 26.37% | Five-Year Return: 15.71% | Ten-Year Return: 13.17% | Risk Potential: 4
The Vanguard S&P 500 ETF tracks the performance of the S&P 500 stock index, a basket of the 500 largest U.S.-based companies by market capitalization. The S&P 500 is a closely watched indicator of overall U.S. economic strength and includes industry leaders such as Apple, Microsoft, Amazon, and Berkshire Hathaway. VOO has become one of the most popular ETFs for investors seeking large-cap U.S. equity exposure.
Like the underlying index, VOO is quite volatile, so it’s not appropriate for conservative investors with short time horizons and little tolerance for principal loss. However, for long-term investors with a higher risk tolerance, VOO offers an excellent way to capture the performance of America’s largest and most stable companies at an exceptionally low cost. The fund’s expense ratio of just 0.03% makes it virtually impossible to beat on a purely cost basis.
5. Vanguard Large-Cap ETF (VV)
Expense Ratio: 0.04% | Five-Year Return: 14.89% | Dividend Yield: 1.48% | Risk Potential: 4
The Vanguard Large-Cap ETF tracks the performance of the CRSP U.S. Large Cap Index, which encompasses a broad basket of mostly large companies based in the U.S. VV includes many of the same holdings as the S&P 500 but with a slightly different methodology and selection criteria. The fund provides exposure to established, well-capitalized companies across all major U.S. sectors.
VV’s performance has been similar, though not identical, to the performance of the S&P 500 index and Vanguard’s VOO ETF, so it’s not entirely clear you would seek exposure to VV if you’ve already added VOO to your portfolio (or vice versa). Both funds serve similar purposes and track large-cap U.S. equities with minimal overlap considerations. For most investors, choosing between VV and VOO comes down to personal preference, as both provide excellent, cost-effective large-cap exposure.
6. Vanguard Extended Market ETF (VXF)
Expense Ratio: 0.06% | Five-Year Return: 13.52% | Dividend Yield: 1.17% | Risk Potential: 5
The Vanguard Extended Market ETF currently holds 8,789 stocks with total net assets exceeding $22.7 billion. VXF diversifies by industry, investing across 11 sectors with the top five being information technology (23.30%), consumer discretionary (16.5%), healthcare (15%), industrials (12.5%), and financials (12.10%). This fund captures small- and mid-cap stocks not included in the S&P 500.
VXF is an excellent complement to VOO for investors seeking comprehensive U.S. market exposure. Together, VTI and VXF provide complete coverage of the entire domestic stock market. Small- and mid-cap stocks often offer higher growth potential than large-cap stocks, though they come with increased volatility. VXF’s low expense ratio of 0.06% makes it an affordable way to capture this growth potential.
7. Vanguard Mid-Cap ETF (VO)
Expense Ratio: 0.04% | One-Year Return: -2.76% | Five-Year Return: 8.00% | Ten-Year Return: 9.91% | Risk Potential: 5
The Vanguard Mid-Cap ETF tracks the CRSP U.S. Mid Cap Index, a broad basket of mid-cap stocks representing midsize companies in a range of industries and sectors. Mid-cap stocks tend to be more volatile than large-cap stocks and less volatile than small-cap stocks—a healthy medium for those seeking higher growth than large-cap funds typically provide without the severe whiplash inherent in small-cap funds.
VO offers investors a balanced approach to equity investing, providing exposure to companies with greater growth potential than established blue chips while maintaining more stability than smaller enterprises. The fund’s expense ratio of just 0.04% ensures that costs don’t erode your returns over time. Mid-cap stocks often represent companies in the growth phase of their lifecycle, offering attractive long-term appreciation potential.
8. Vanguard FTSE Developed Markets ETF (VEA)
Expense Ratio: 0.05% | Five-Year Return: 8.34% | Dividend Yield: 2.16% | Risk Potential: 4
The Vanguard FTSE Developed Markets ETF provides exposure to large-, mid-, and small-cap equities in developed markets outside the United States and Canada. VEA also provides diversification by market cap, with 72.1% of holdings in large-cap companies, 4.1% in medium/large-cap companies, 12.2% in medium-cap companies, 5.2% in medium/small-cap companies, and 6.1% in small-cap companies.
VEA offers investors a practical way to access mature developed economies such as Japan, United Kingdom, France, Germany, and Australia. These markets represent some of the world’s strongest and most stable economies. With an expense ratio of just 0.05%, VEA provides an efficient way to diversify internationally while maintaining lower risk than emerging market investments.
9. Vanguard Growth ETF (VUG)
Expense Ratio: 0.04% | One-Year Return: 1.24% | Five-Year Return: 13.05% | Ten-Year Return: 13.54% | Risk Potential: 4
The Vanguard Growth ETF mirrors the performance of the CRSP US Large Cap Growth Index, a basket of mostly large companies with high growth potential. Growth stocks such as Amazon, Facebook, and Microsoft represent companies expected to deliver above-average earnings growth. VUG concentrates on these companies across 282 holdings, with total net assets exceeding $4.6 billion.
VOOG achieves diversification by investing across 11 industries, with the information technology (40.50%), consumer discretionary (14.90%), communications (13.10%), healthcare (9.80%), and industrials (7.30%) industries constituting the top five holdings. VUG is ideal for investors seeking growth-oriented exposure with an emphasis on large, established companies. The fund’s low expense ratio of 0.04% and strong historical performance make it an attractive choice for growth-focused portfolios.
Understanding Vanguard ETF Basics
Vanguard issues approximately 2,000 index, sector, and fixed-income ETFs. According to Vanguard, 82% of all Vanguard funds and 94% of actively managed Vanguard funds beat the returns of their peer-group averages during the decade ended December 31, 2020. This impressive track record demonstrates the quality and effectiveness of Vanguard’s investment approach.
Between Vanguard’s ETFs and mutual funds and the competing non-Vanguard funds also available on the platform, Vanguard brokerage clients have access to thousands of very low-cost ETFs and mutual funds. This represents a significant advantage over many robo-advisors, which tend to limit investor choice to a relative handful of favored funds. Vanguard’s commitment to low costs and investor choice has made it a preferred choice for passive investors worldwide.
Risk Considerations and Investment Strategy
Each Vanguard ETF listing includes Vanguard’s proprietary “risk potential” score, which measures the risk of principal loss and growth on a scale of 1 to 5, with 5 being the riskiest. Funds composed primarily of stocks are higher-risk than funds that primarily include bonds and other fixed-income instruments. Understanding these risk classifications helps investors construct portfolios aligned with their risk tolerance and time horizon.
For younger investors with decades until retirement, equity-focused ETFs like VTI and VOO may form the foundation of a portfolio. As investors approach retirement, incorporating bond-focused funds like BND becomes increasingly important to reduce volatility and preserve capital. The key to long-term investment success is developing a diversified portfolio that reflects your personal circumstances, goals, and risk tolerance.
Mutual Fund Alternative
Most of these ETFs are available as Vanguard index funds (mutual funds), usually with investment minimums of $3,000. If you can meet the minimum investment and don’t mind waiting until the next trading session for your orders to fill, consult your financial advisor about investing in those instruments instead of ETFs. The choice between ETFs and mutual funds often depends on investment size, trading preferences, and tax considerations rather than performance, as both track the same underlying indices.
Frequently Asked Questions
Q: What is the difference between Vanguard ETFs and mutual funds?
A: Vanguard offers both ETFs and mutual funds that track the same indices. The main differences are that ETFs trade throughout the day like stocks, have no minimum investment requirement (just need enough for one share), and trade commission-free. Mutual funds require a minimum investment of $3,000, but orders fill at the end-of-day price and may have slightly lower expense ratios for some funds.
Q: Which Vanguard ETF is best for beginners?
A: VTI (Vanguard Total Stock Market ETF) is often recommended for beginners because it provides instant diversification across the entire U.S. stock market with a single investment. Its ultra-low expense ratio of 0.03% and straightforward approach make it an ideal core holding for any long-term investment portfolio.
Q: How can I calculate my potential returns with Vanguard ETFs?
A: You can look at each ETF’s historical returns (one-year, five-year, ten-year) to estimate potential future performance, though past performance doesn’t guarantee future results. Many financial calculators allow you to input regular monthly contributions and expected return rates to project long-term portfolio growth.
Q: Are Vanguard ETFs suitable for retirement accounts?
A: Yes, Vanguard ETFs are excellent choices for retirement accounts including IRAs, 401(k)s, and other qualified plans. Their low costs and diversified holdings make them particularly effective for long-term wealth accumulation within tax-advantaged retirement accounts.
Q: What is Vanguard’s expense ratio advantage?
A: Vanguard’s average expense ratio is 82% lower than the industry average. This means investors can save approximately $30,042 in fees over 30 years on an initial investment of just $50,000 compared to investing with firms charging industry-average fees.
References
- Vanguard Brokerage Review – Low-Cost Investments for Retirement — Money Crashers. 2024. https://www.moneycrashers.com/vanguard-review-brokerage-investment-funds/
- 9 Best Vanguard ETFs to Buy in 2025 — Money Crashers. 2024. https://www.moneycrashers.com/best-vanguard-etfs-funds/
- 10 Best Vanguard ETFs for Low-Cost Holding — Sarwa. 2021. https://www.sarwa.co/blog/what-is-the-best-vanguard-etf/
- 3 Powerhouse Vanguard ETFs You Can’t Go Wrong With — Nasdaq. 2024. https://www.nasdaq.com/articles/3-powerhouse-vanguard-etfs-you-cant-go-wrong-with
- Vanguard vs. Fidelity – Which Investment Firm Is Right For You? — Money Crashers. 2024. https://www.moneycrashers.com/vanguard-vs-fidelity/
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