Vanguard is one of the powerhouses of the ETF industry, managing 75 different funds and representing approximately $ 1.5 trillion in total assets under management. It is accomplished through its reputation as a low-cost industry leader, a model that many issuers have now replicated.
If you are looking to create a wallet or just add to your existing wallet, Vanguard is a great place to use. Most of its ETFs are fairly straightforward and broad based. This isn’t necessarily exciting for investors looking for the next flashy theme or niche, but it’s perfect for building an ultra-cheap and well-diversified long-term portfolio.
Sifting through 75 different ETFs can be a bit tricky, so I want to narrow the menu down to just 11 names that are perfect for inclusion in a long term portfolio. Because they are all great core stocks, they are funds that you can buy and hold forever.
ETF Vanguard Total Stock Market (VTI)
This fund may be the ideal position if you want the broadest possible US market coverage. He owns large, mid and small cap companies in value and growth styles. Best of all, it only charges 0.03% per annum, or just $ 3 for every $ 10,000 invested, to own this portfolio. You might not find a better deal anywhere in the ETF world.
ETF Vanguard S&P 500 (VOO)
Maybe you want to stick only to large caps instead of venturing into riskier stocks of small companies. VOO, which is Vanguard’s second largest ETF, simply matches the S&P 500 and is another cornerstone of the portfolio. Like VTI, it also only charges 0.03% per year.
Vanguard Immobilier ETF (VNQ)
Along with stocks and bonds, real estate is considered by many to be the 3rd class of asset. Some people suggest that real estate should make up around 10% of your overall portfolio, but the S&P 500, for example, only has a 2.5% allocation in the sector. VNQ can be used to increase your property allowance and fill in any gaps that funds, such as VTI and VOO, may have.
Vanguard Dividend Appreciation ETF (VIG)
VIG is probably one of my three favorite dividend ETFs. This is the prototypical dividend growth ETF requiring qualifying components to have at least 10 consecutive years of annual dividend increases (although it eliminates REITs). Targeting dividend producers is one of the most popular income strategies among dividend seekers and VIG is one of the best.
Vanguard High Dividend Yield ETF (VYM)
VYM, as the name suggests, targets stocks that pay above-average dividend yields. Because it is market cap weighted, it leans heavily towards well-known large caps like VIG, it also ignores REITs which reduces some of the potential for high return but also reduces some portfolio risk. .
Vanguard Total Bond Market ETF (BND)
BND could be seen as the fixed income version of VTI. “Total” may be a bit of a misnomer because it only targets investment grade bonds, but it splits its investments between treasury bills and corporates. BND has almost 2/3 of the assets dedicated to government bonds, which is a bit heavy, so you might consider increasing it with another corporate bond ETF.
Vanguard Short Term Inflation Protected ETF (VTIP)
Inflation protection hasn’t really been a major concern in the market, but it’s good to have TIPS for that extra level of security. Most portfolios should include at least an allocation to inflation-protected Treasury securities, and VTIP’s focus on the short end of the maturity spectrum makes it a safer choice.
Vanguard Total World Stock ETF (VT)
If you really want full exposure to the equity markets, this is your fund. VT combines a total US market portfolio with a total international market portfolio to provide equity coverage from virtually every corner of the world. The Vanguard Total World Bond ETF (BNDW) would be an ideal complement to VT.
Vanguard Total International Stock ETF (VXUS)
VXUS provides diversified exposure to developed and emerging markets around the world, with the exception of the United States. With an expense ratio of just 0.08%, you’ll be hard pressed to find a cheaper option for investing in foreign stocks.
Vanguard Short Term Cash ETF (VGSH)
Vanguard does not have a Total Treasury Market Bond ETF, but offers choices on all maturities, including long, mid and short options. All Treasury-focused ETFs would work according to your goals, but VGSH, which targets 1-3 year maturities, is my representative pick here.
Vanguard ESG U.S. Equity ETF (ESGV)
Socially conscious investing has grown in leaps and bounds in 2020 and the trend is only increasing. Vanguard recently launched ESG-focused equity and bond funds and would be a good choice for those who wish to omit items, such as guns, alcohol, and tobacco, from their portfolios.
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