The 9 Best Vanguard Mutual Funds to Buy

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last updated 20 April 2023

When it comes to the best Vanguard mutual funds, you might think the universe of offerings is so large that it's impossible to pick the right options. We wouldn't blame you: Vanguard is one of the world's leading asset managers, with a staggering $8 trillion under management. That's in part because of the firm's commitment to providing simple, low-cost mutual fund offerings to the general public instead of complicated and costly offerings that don't deliver.

There's countless research that shows the perils of so-called "active" management. The latest proof comes from Refinitiv Lipper, whose data shows that about 63% of active managers of equities funds did not beat their respective benchmarks in 2022. With numbers like that, boring old index funds tied to a fixed list of stocks seems to be the way to go.

"Given that most markets – and funds – have declined over the past year, smart investors will carve out time now to review their portfolio and make any necessary adjustments," writes Nellie Huang, senior associate editor for the investing team at Kiplinger's Personal Finance. "A good mix of holdings will include both stocks and bonds, pay adequate attention to small and large companies – foreign and domestic – and be balanced between value-priced shares and growth stocks."

Disclaimer

Data is as of April 19. Fund yields represent the trailing 12-month yield, which is a standard measure for equity funds, unless otherwise noted. Minimum initial investment for all funds listed here is $3,000.

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Vanguard 500 Index Fund Admiral Shares

Fund category: Large blend
Assets under management: $290.6 billion
Yield: 1.6%
Expense ratio: 0.04%, or $4 annually for every $10,000 invested

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Vanguard Total Stock Market Index Fund Admiral Shares

Fund category: Large blend
Assets under management: $285.0 billion
Yield: 1.6%
Expense ratio: 0.04%, or $4 annually for every $10,000 invested

While this has worked out well for VTSAX so far in 2023 amid the tech sector's outperformance, it could swing the other way if these stocks start to lag. "Given the huge run-up in the past three months among many tech stocks – it might not take much bad news for [tech's] performance gap to narrow significantly," says Mike Dickson, head of research at Charlotte-based asset management firm Horizon Investments.

But while the VTSAX is a bit top heavy, it's hard to argue with the simplicity of this fund or its scale, which is why it's one of the best Vanguard mutual funds to buy. There is currently more than $1 trillion – yes, trillion with a "T" – invested across the various versions of the Vanguard Total Stock Market funds out there. So while it's not particularly sophisticated, you'll be in good company with other investors who think long-term, buy-and-hold index funds are the way to go.

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Vanguard Dividend Appreciation Index Fund Admiral Shares

Fund category: Large blend
Assets under management: $66.6 billion
Yield: 2.0%
Expense ratio: 0.08%

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Vanguard Health Care Fund Investor Shares

Fund category: Health
Assets under management: $46.7 billion
Yield: 0.8%
Expense ratio: 0.30%*

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Vanguard Real Estate Index Fund Admiral Shares

Fund category: Real estate
Assets under management: $32.5 billion
Yield: 4.1%
Expense ratio: 0.12%

VGSLX is music to the ears of many investors who aren't particularly impressed with the yield on other offerings on this list of the best Vanguard mutual funds. Some of the biggest paydays on Wall Street come from the best REITs, or real estate investment trusts. That's because this special class of company is granted operational tax breaks to accommodate the capital-intensive nature of real estate and property management. But in exchange, REITs must deliver 90% of taxable income back to their shareholders via dividends.

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Vanguard Total International Stock Index Fund Admiral Shares

Fund category: Foreign large blend
Assets under management: $56.1 billion
Yield: 2.9%
Expense ratio: 0.11%

This Vanguard investment is an "ex-U.S." mutual fund, designed to specifically exclude any companies headquartered in the United States. Not only does that provide exposure to international stocks that many investors are looking for, it also allows for an easy overlay that ensures you don't have redundant domestic equity holdings across your mutual funds. This makes it one of the best Vanguard mutual funds to buy.

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Vanguard Emerging Markets Stock Index Fund Admiral Shares

Fund category: Diversified emerging markets
Assets under management: $72.4 billion
Yield: 3.7%
Expense ratio: 0.14%

As is typical of all the names featured on this list of the best Vanguard mutual funds to buy, this index fund is a cheap and simple option that takes the guesswork out of what some might think to be a complicated strategy. The VEMAX offers a single, simple holding, diversified across some 5,700 stocks. Top stocks include the obvious leaders like China tech giants Alibaba Group Holdings (BABA) and Tencent Holdings, but also many other emerging market growth opportunities you may never have heard of like Beijing-based shopping platform Meituan.

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Vanguard Total Bond Market Index Fund Admiral Shares

Fund category: Immediate core bond
Assets under management: $91.2 billion
SEC yield: 2.6%**
Expense ratio: 0.05%

And the once-sleepy bond market has seen renewed interest thanks to the fact that yields in many investment-grade bonds are moving higher than the yield offered by popular dividend stocks. "Fixed-income yields are higher than they were a year ago and may offer investors potential income sources beyond stock dividends and real estate holdings," says Michelle Wan, investment strategy analyst at Wells Fargo Investment Institute.

The Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX, $9.65) is not just the best Vanguard mutual fund to offer diversified exposure to the bond market, but one of the biggest and most established offerings across any asset manager. It boasts an enormous portfolio of more than 10,000 "investment grade" bonds, meaning debt securities of high-credit quality from corporations or government entities that are at lower risk of default. That means you get a lot of individual bonds to provide diversification, but also high standards to offer peace of mind.

To be clear, the bond market is more stable than the stock market, but this can cut both ways. It's almost impossible to imagine bonds delivering a quick 10% or 20% in principal gains, while the stock market has had many windows of time where it's been able to pull that off. Still, if you prefer reliable income instead of higher risk investments, this is one of the best Vanguard mutual funds to layer into your portfolio.

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Vanguard Wellington Fund Investor Shares

Fund category: Allocation (50% to 70% equity)
Assets under management: $103.8 billion
Yield: 2.1%
Expense ratio: 0.25%

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Jeff Reeves writes about equity markets and exchange-traded funds for Kiplinger. A veteran journalist with extensive capital markets experience, Jeff has written about Wall Street and investing since 2008. His work has appeared in numerous respected finance outlets, including CNBC, the Fox Business Network, the Wall Street Journal digital network, USA Today and CNN Money.