The 7 Best Vanguard ETFs to Buy Now

Vanguard ETFs to buy - The 7 Best Vanguard ETFs to Buy Now

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[Editor’s note: This article is regularly updated to include the most relevant information available.]

  • Offering a wide range of opportunities across the global spectrum, the best Vanguard ETFs to buy provide a sensible approach to the markets.
  • Vanguard Large-Cap ETF (VV): With a healthy mix of blue chips, Large-Cap ETF is one of the best Vanguard ETFs to buy for stability and reasonable growth.
  • Vanguard Dividend Appreciation ETF (VIG): As inflation takes a bite out of household earnings power, the Divided Appreciation ETF has suddenly become one of the best Vanguard ETFs to buy.
  • Vanguard Small-Cap ETF (VB): The best Vanguard ETFs to buy don’t have to be completely boring, as investors can dial up their risk-to-reward profile with the Small-Cap ETF.
  • Vanguard Total World Stock ETF (VT): While it’s usually best to stay in the domestic realm, exposure to the Total World Stock ETF can broaden your portfolio’s horizons
  • Vanguard Energy ETF (VDE): An investment appropriate for our times, the Energy ETF can help turn the soaring cost of energy a bit to your favor.
  • Vanguard Consumer Staples ETF (VDC): With household budgets under fire due to inflation, more attention will be paid to the essentials, thus benefitting the Consumer Staples ETF.
  • Vanguard Emerging Markets (VWO): For those that want to amplify their potential returns, investors can take a wager with Vanguard Emerging Markets.

Vanguard logo

Exchange-traded funds (ETFs) have long been an integral component of Wall Street and there may be no better player in this game than Vanguard. Primarily, ETFs offer a wide canvas for investors, providing exposure to a basket of stocks or other tradable assets under one umbrella. It may be perfect for folks who have trouble making up their mind.

In all seriousness, ETFs, in addition to their extensive footprint, also inherently offer risk mitigation. Of course, it depends largely on what the focus of the ETF is. If it’s centered on completely speculative ventures, the fund will still be risky. However, the best Vanguard ETFs to buy will incorporate high-quality names under the specified category. Thus, if one name flounders, the other companies in the basket can help pick up the slack.

To be fair, one of the downsides of ETFs is that while they may mitigate downside, they also mitigate upside. In other words, a rip-roaring single stock might not lift the average much if the other stocks lag. That’s true for any fund, including the best Vanguard ETFs to buy.

Still, with the troubling economic cycle we’re facing, a wide footprint is probably the most appropriate. Therefore, here are the best Vanguard ETFs to buy now:

Ticker Company Price
VV Vanguard Large Cap Index Fund $174.26
VIG Vanguard Dividend Appreciation Index Fund $144.23
VB Vanguard Small Cap Index Fund $177.85
VT Vanguard Total World Stock Index Fund $86.19
VDE Vanguard Energy Index Fund $102.55
VDC Vanguard Consumer Staples Fund $185.89
VWO Vanguard Emerging Markets Stock Index Fund $41.86

Vanguard ETFs to Buy: Vanguard Large-Cap ETF (VV)

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While large blue-chip companies may represent the most obvious — and thus most-recommended — investments, that shouldn’t necessarily impugn their underlying opportunity. And that’s the basis behind the Vanguard Large-Cap ETF (NYSEARCA:VV). True, the individual names that comprise VV stock’s top holdings probably won’t deliver astounding gains. But as established businesses, they’re likely to weather the storm for the long haul.

What makes the Large-Cap ETF one of the best Vanguard ETFs to buy in July is its emphasis on quality. At the time of writing, its top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). Primarily, the fund features the heaviest exposure to the technology sector with a 25.2% weighting, followed by healthcare and financial services, at 14.45% and 13.4%, respectively.

Even if you don’t care for blue-chips, VV has an expense ratio — or the cost of owning an ETF or mutual fund — of 0.04%. In contrast, the category average is 0.43%. Therefore, one of the best Vanguard ETFs to buy is also quite a good deal.

Vanguard Dividend Appreciation ETF (VIG)

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As literally every person that works for a living knows, inflation is a major problem right now. Of course, what makes inflation pernicious is the resultant decline in the dollar’s purchasing power. Essentially, the real income of workers decline, a sort of hidden tax. Therefore, passive income, which is always an important component of a holistic portfolio, has become even more critical.

And that brings us to the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG), one of the best Vanguard ETFs to buy in July simply because of the present paradigm shift. With the consumer price index uncomfortably close to double digits, it’s crucial for investors to secure various income streams. The Dividend Appreciation ETF can help by focusing on firms with reliable payouts.

VIG’s top three holdings are Johnson & Johnson (NYSE:JNJ), Microsoft and UnitedHealth Group (NYSE:UNH). Interestingly, VIG’s largest sector represented in its holdings is financial services at 20.3%, followed by technology and healthcare at 16.8% and 15.9%, respectively.

Finally, VIG features an expense ratio of 0.06%, comparing favorably to the category average of 0.43%.

Vanguard ETFs to Buy: Vanguard Small-Cap ETF (VB)

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While the label of best Vanguard ETFs to buy almost has a sterile or clinical tone to it, the reality is that these funds command a wide footprint. Should you want to dial up your risk-to-reward profile, you can easily do so, particularly with the Vanguard Small-Cap ETF (NYSEARCA:VB). Focusing on small-capitalization (cap) firms, the individual names under the basket are inherently less stable. However, they make up for it with stronger upside potential.

VB’s top three holdings are Marathon Oil (NYSE:MRO), Constellation Energy (NASDAQ:CEG) and Quanta Services (NYSE:PWR). As of this writing, all three stocks are up double digits on a year-to-date basis, demonstrating their relevance during this new geopolitical paradigm. VB has the most exposure to the industrials sector with a 17.2% weighting, followed by technology and financial services at 14.6% and 14.4%, respectively.

With other publications ranking the Small-Cap ETF as one of the best Vanguard ETFs to buy within the high-growth potential market, VB is a solid proposition. It also features an expense ratio of 0.05%, well below the category average of 0.35%.

Vanguard Total World Stock ETF (VT)

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Before the coronavirus pandemic that uprooted fundamental understandings of the market, a common aphorism was that the U.S. was the best house in the worst block. While a cynical description, it’s arguably valid. Owning the largest economy in the world along with the world’s reserve currency, the U.S. is uniquely privileged. Still, some investors may want to broaden their horizons, which is where Vanguard Total World Stock ETF (NYSEARCA:VT) enters the frame.

Although the VT fund features a heavy mix of U.S.-based stocks (nearly 59% in terms of geographic breakdown), it also features significant exposure to various markets around the globe, including the Eurozone, Japan, Asian emerging markets, Europe outside the Eurozone and the U.K. Additionally, VT includes exciting opportunities in Latin America and Africa.

Sector wise, technology dominates the VT fund with a 19.2% weighting, followed by financial services and healthcare at 15.9% and 12%, respectively. Like the other best Vanguard ETFs to buy, the Total World Stock fund features a low expense ratio of 0.07%, which is substantially below the category average of 0.52%.

Vanguard ETFs to Buy: Vanguard Energy ETF (VDE)

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When Russia invaded Ukraine in February of this year, the action disrupted geopolitics not only for its callousness, but also because it effectively removed the aggressor as a reliable economic partner. It’s quite possible that Russia — irrespective of what happens in Ukraine — will be isolated for several years. Frankly, it’s just politically unpalatable to do business with a de facto dictatorship.

But that also draws attention to the Vanguard Energy ETF (NYSEARCA:VDE), one of the best Vanguard ETFs to buy based on the new global paradigm shift. With Russia being a global powerhouse in terms of energy exports, the U.S.-led sanctions against Russia will likely foster sustained upward pressure on key resource prices. Perhaps the only viable caveat to this forecast is if the world succumbs to a crippling recession.

Barring that outcome, investors can reasonably expect to profit from VDE. Its top three holdings are Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and Conoco Phillips (NYSE:COP). Notably, VDE features an expense ratio of 0.10%, well below the category average of 0.43%.

Vanguard Consumer Staples ETF (VDC)

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Among the myriad problems associated with a soaring inflation rate is the widening wealth gap between the middle class and the social elites. As I mentioned recently in an article to explain why stocks fell down on the Jun. 28 session, the loss of consumer confidence is contextually worse today since the difference between the share of net wealth held by the middle class is ridiculously low compared to the top 1% of earners.

Put another way, people have fewer resources to handle economic shocks. Cynically, though, this backdrop may bolster the Vanguard Consumer Staples ETF (NYSEARCA:VDC). The harsh reality is that during down cycles, strained household budgets will focus largely on the essentials, eliminating discretionary purchases down to zero depending on the severity of the storm. Therefore, VDC is one of the best Vanguard ETFs to buy because of simple probabilities and trend recognition.

VDC’s top three holdings are Procter & Gamble (NYSE:PG), Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP), which are reliable enterprises. Also, the VDC has an expense ratio of 0.1%, below the category average of 0.42%.

Vanguard ETFs to Buy: Vanguard Emerging Markets (VWO)

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As mentioned earlier, the best Vanguard ETFs to buy tend to focus on the U.S. market because there’s where most of the established action is. However, those who are younger or who want to ramp up their reward potential are perhaps better served looking to riskier high-growth regions. If this sounds like your cup of tea, the Vanguard Emerging Markets (NYSEARCA:VWO) may be right up your alley.

When the VWO literature says that it’s focusing on emerging markets, that’s no joke. Based on geographic breakdown, the lion’s share of stocks under VWO — nearly 56% — are in the emerging Asian economies. The next biggest segment at 19.4% is the developed Asian markets. Additionally, VWO features significant exposure to the Middle East and Africa at 8.4% and 4.3%, respectively.

Sector wise, financial services make up the bulk of exposure with a 21.4% weighting, followed by technology and consumer cyclical at 17.1% and 12.3%, respectively. Finally, VWO has an expense ratio of 0.08%, much lower than the category average of 0.46%.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

 


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