ForfforAre you ready to supercharge your investment portfolio in 2024? Explore the best Vanguard ETFs for 2024 to maximize your international investment portfolio. Discover top-rated ETFs with low fees, broad market exposure, and superior performance.
With market volatility and economic uncertainty rising, finding robust and reliable investment options is more critical than ever. Vanguard ETFs continue to be a cornerstone for novice and experienced investors, offering a blend of diversification, low costs, and strong performance. In 2023 alone, Vanguard ETFs saw over $200 billion in net inflows, underscoring their growing popularity and investor confidence. Here, we present the seven best Vanguard ETFs for 2024, designed to maximize your portfolio’s potential.
The company is highly regarded among professional investors and financial experts due to its extensive offerings. Vanguard’s ETFs offer advantages over traditional mutual funds for self-directed retail investors, especially if they are not restricted by a 401(k) plan’s choices.
Key Takeaways
- Vanguard Total International Stock ETF (VXUS) offers broad exposure to over 6,000 non-U.S. stocks, making it a comprehensive option for international diversification.
- Vanguard FTSE All-World ex-US Index ETF (VEU) provides access to various international stocks, excluding U.S. companies, which can help balance your portfolio.
- Vanguard FTSE All-World ex-US Small Cap ETF (VSS) focuses on smaller companies outside the U.S., offering the potential for higher growth but with increased volatility.
- Vanguard European Stock Index ETF (VGK) targets European markets, providing exposure to established companies in this region.
- Vanguard International Dividend Appreciation ETF (VIGI) focuses on international companies with a history of increasing dividends, making it a good choice for income-focused investors.
What are Vanguard ETFs?
Vanguard ETFs are funds that track specific indexes and are traded on stock exchanges. These funds offer a diversified mix of stocks or bonds and aim to replicate the performance of a particular index, such as the S&P 500 or the Total Bond Market.
1. Vanguard Total International Stock ETF (VXUS)
The Vanguard Total International Stock ETF (VXUS) seeks to track the performance of the FTSE Global All Cap ex US Index. This ETF provides broad exposure across developed and emerging non-U.S. equity markets. It holds nearly 8,000 stocks, making it a comprehensive option for international diversification.
Key Features
- Expense Ratio: 0.08%
- Total Assets: $72.5 billion
- Number of Holdings: Nearly 8,000
- Inception Date: January 26, 2011
Performance
| Time | Annualized Return |
|---|---|
| 1 Year | 9.50% |
| 5 Years | 6.55% |
| 10 Years | 4.48% |
What You Should Know
VXUS is categorized as an “aggressive” fund, which may be subject to significant share price swings. It holds a mix of emerging market, European, and Pacific stocks, providing a well-rounded international investment option.
For investors looking for a single fund to gain international exposure, VXUS offers a robust and diversified solution.
2. Vanguard FTSE All-World ex-US Index ETF (VEU)
The Vanguard FTSE All-World ex-US Index ETF (VEU) seeks to track the performance of the FTSE All-World ex-US Index. This ETF employs a passively managed, full-replication strategy, ensuring the fund remains fully invested in the index’s constituents. VEU offers exposure to a broad range of international stocks, excluding those from the United States.
Key Facts
- Expense Ratio: 0.07%
- Total Assets: $39.3 billion
- 10-Year Annualized Return: 4.60%
- Number of Holdings: Approximately 3,600 stocks
Pros and Cons
Pros
- Exposure to internationally developed and emerging markets.
- A great option for diversification.
- A large number of individual holdings.
Cons
- Historically lower returns compared to U.S.-only ETFs.
- Higher expense ratio than VTI and VOO.
- Does not offer targeted developed or emerging market-only exposure.
Ignoring international business can make you miss out on some great investment opportunities—not to mention the typically more generous dividends than the U.S. market generates.
3. Vanguard FTSE All-World ex-US Small Cap ETF (VSS)
The Vanguard FTSE All-World ex-US Small Cap ETF (VSS) is an excellent choice for investors looking to diversify their portfolios with international small-cap stocks. This ETF focuses on small-cap companies outside the United States, providing exposure to various markets and sectors.
Key Features
- Global Reach: VSS includes small-cap stocks from developed and emerging markets, offering a comprehensive international investment.
- Diversification: With thousands of holdings, this ETF minimizes the risk associated with individual stocks.
- Cost-Effective: VSS has a low expense ratio, making it a cost-effective option for investors.
Performance
| Metric | Value |
|---|---|
| Expense Ratio | 0.11% |
| Number of Holdings | ~4,000 |
| 10-Year Annualized Return | 5.2% |
Why Choose VSS?
Investors might consider VSS for its broad international exposure and focus on small-cap stocks, which can offer higher growth potential than large-cap stocks. The ETF’s low expense ratio makes it an attractive option for cost-conscious investors.
VSS – Vanguard FTSE All-World ex-US Small Cap ETF – check VSS price, review total assets, see historical growth, and review the analyst rating from Morningstar.45
4. Vanguard European Stock Index ETF (VGK)
The Vanguard European Stock Index ETF (VGK) seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in the major markets of Europe. This ETF provides a convenient way to get broad exposure to European stocks, making it an excellent choice for investors looking to diversify internationally.
Key Features
- Expense Ratio: VGK has a low expense ratio, making it a cost-effective option for investors.
- Holdings: The fund includes stocks from various sectors, providing a well-rounded investment.
- Performance: Historically, VGK has shown solid performance, reflecting the overall growth of European markets.
Benefits
- Diversification: Investing in VGK allows for diversification across multiple European countries and industries.
- Cost-Effective: With its low expense ratio, VGK is an affordable way to gain international exposure.
- Growth Potential: European markets have significant growth potential, which can be captured through this ETF.
VGK is a strategic choice for those looking to invest in European markets without the complexity of picking individual stocks.
5. Vanguard International Dividend Appreciation ETF (VIGI)
The Vanguard International Dividend Appreciation ETF (VIGI) seeks to track the performance of the S&P Global ex-U.S. Dividend Growers Index. This index measures the investment return of non-U.S. companies that have a record of increasing dividends annually for at least 10 years in a row. This makes VIGI an excellent choice for investors looking for international exposure with a focus on dividend growth.
Key Metrics
| Metric | Value |
|---|---|
| Expense Ratio | 0.22% |
| Dividend Yield | 1.79% |
| 10-Year Average Annual Return | 11.05% |
Why Choose VIGI?
- Focuses on non-U.S. companies with a strong history of dividend growth
- Provides diversified exposure to international markets
- Suitable for long-term investors seeking both growth and income
VIGI’s strategy of investing in companies with a consistent record of increasing dividends makes it a reliable option for those looking to add international dividend stocks to their portfolio.
6. Vanguard Total World Stock ETF (VT)
The Vanguard Total World Stock ETF (VT) is an excellent choice for investors seeking a globally diversified portfolio. With an expense ratio of just 0.07%, VT offers exposure to over 9,500 stocks across all 11 market sectors. This ETF tracks the Spliced Total World Stock Index, providing a comprehensive investment in large–, mid-, and small-cap stocks from North America, Europe, the Pacific, and emerging markets.
Key Features
- Expense Ratio: 0.07%
- Number of Stocks: Over 9,500
- Market Sectors: All 11 sectors
- Geographic Exposure: North America, Europe, Pacific, and Emerging Markets
Performance
| Time | Annual Return |
|---|---|
| 10 Years | 8.5% |
Investors tired of slicing and dicing their portfolio’s equity allocation can opt for maximum simplicity by buying VT. The ETF tracks the Spliced Total World Stock Index, a variant of the FTSE Global All Cap Index.
7. Vanguard Emerging Markets Stock Index ETF (VWO)
The Vanguard Emerging Markets Stock Index ETF (VWO) offers investors broad exposure to emerging market economies. Vanguard’s VWO is one of the cheapest emerging markets ETFs on the market. The annual cost of the VWO is 0.08%. Investors holding VWO portfolios can diversify their investments across multiple developing countries.
Key Features
- Expense Ratio: 0.08%
- Total Assets: $36.4 billion
- 10-Year Annualized Rate: 4.60% (as of June 3)
Pros and Cons
Pros
- Exposure to internationally developed and emerging markets.
- Tracks bigger players.
- Can be used to tax-loss harvest with VXUS.
Cons
- Historically lower returns compared to U.S.-only ETFs.
- Higher expense ratio than VTI and VOO.
- No international small-cap exposure.
VWO is a solid choice for investors looking to gain exposure to emerging markets while keeping costs low.
8. Vanguard Pacific Stock Index ETF (VPL)
The Vanguard FTSE Pacific ETF (VPL) is designed to expose investors to companies based around the Pacific Rim. The fund seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in Japan, Australia, Hong Kong, New Zealand, and Singapore.
| Metric | Value |
|---|---|
| Expense Ratio | 0.08% |
| Dividend Yield | 3.21% |
| 10-Year Avg. Ann. Return | 4.82% |
About 55% of the fund is invested in companies based in Japan, with another 20% in Australian stocks. The remaining exposure is spread across Korea, Hong Kong, Singapore, and New Zealand. The top-10 holdings include well-known international brands such as Samsung, Toyota, and Sony.
VPL provides international investors with low-cost access to major firms in the developed Pacific markets.
9. Vanguard Global ex-US Real Estate ETF (VNQI)
The Vanguard Global ex-US Real Estate ETF (VNQI) offers investors exposure to international real estate markets, excluding the United States. This ETF is designed to track the performance of the S&P Global ex-U.S. Property Index, which is a float-adjusted index.
Key Features
- Expense Ratio: 0.12%
- Total Assets: $3.36 billion
- Inception Date: November 1, 2010
- Dividend Yield: 3.89%
Performance
| Period | Return |
|---|---|
| 1-Year | -4.95% |
| 3-Year | 2.94% |
| 5-Year | -3.20% |
VNQI suits investors looking to diversify their portfolios with international real estate assets. The fund has a relatively low expense ratio and a decent dividend yield, making it an attractive option for income-focused investors.
The fund employs an indexing investment approach designed to track the performance of the S&P Global ex-U.S. Property Index, a float-adjusted index.
10. Vanguard FTSE Developed Markets ETF (VEA)
The Vanguard FTSE Developed Markets ETF (VEA) seeks to track the performance of the FTSE Developed All Cap ex US Index. This fund employs an indexing investment approach designed to track the index’s performance, which measures the investment return of stocks issued by companies in developed markets outside the United States.
Pros and Cons
Pros
- Exposure to internationally developed and emerging markets.
- A great option for diversification.
- A large number of individual holdings.
Cons
- Historically lower returns compared to U.S.-only ETFs.
- Higher expense ratio than VTI and VOO.
- Does not offer targeted developed or emerging market-only exposure.
Fund Details
| Metric | Value |
|---|---|
| Expense Ratio | 0.07% |
| Total Assets | $39.3 billion |
| 10-year Annualized Rate (as of June 3) | 4.48% |
The investment seeks to track the performance of the FTSE Developed All Cap ex US Index. The fund employs an indexing investment approach designed to track the performance of the index, which measures the investment return of stocks issued by companies located in developed markets outside the United States.
How to Buy Worth Vanguard ETFs
Buying Vanguard ETFs involves a few simple steps: choosing a brokerage, funding your account, selecting the ETFs, placing your order, and monitoring your investments. Following these steps guide, you can easily add Vanguard ETFs to your investment portfolio and work towards achieving your financial objectives.
Choose a Brokerage Account
The first step is to open a brokerage account. Vanguard ETFs can be purchased through Vanguard’s brokerage platform or other brokerage firms like Fidelity, Charles Schwab, or TD Ameritrade. Compare various brokers’ features, fees, and services to find the one that best meets your needs.
Fund Your Account
Once you have chosen a brokerage, you need to fund your account. This typically involves linking your bank account to your brokerage account and transferring the desired amount of money. Some brokers might have a minimum deposit requirement, so check the specifics with your chosen provider.
Select Your Vanguard ETFs
Research and choose the Vanguard ETFs that align with your investment goals. Vanguard offers various ETFs covering different asset classes, sectors, and geographies. Consider factors such as expense ratios, historical performance, and underlying assets. Common choices include the Vanguard Total Stock Market ETF (VTI), Vanguard S&P 500 ETF (VOO), and Vanguard Total Bond Market ETF (BND).
Place Your Order
With your account funded and ETFs selected, you can place your order. Log in to your brokerage account, search for the ETF by its ticker symbol, and decide on the number of shares you wish to purchase. You can place a market order, which buys at the current market price, or a limit order, which buys only at a specified price or better.
Monitor and Manage Your Investment
After purchasing, it’s important to monitor your ETF investments regularly. Monitor performance, market conditions, and any news that might affect your holdings. Periodically reassess your portfolio to ensure it aligns with your long-term financial goals.
Best Vanguard ETF for Roth IRA
1-Vanguard Total Stock Market ETF (VTI)
The Vanguard Total Stock Market ETF (VTI) is an excellent choice for a Roth IRA. It offers comprehensive exposure to the entire U.S. stock market, covering large-, mid-, and small-cap stocks. This broad diversification helps mitigate risk and maximize growth potential over the long term.
2-Vanguard S&P 500 ETF (VOO)
The Vanguard S&P 500 ETF (VOO) is another top pick. It tracks the performance of the S&P 500 Index, representing the largest and most stable U.S. companies. Its low expense ratio and historical performance make it a solid option for steady growth.
3-Vanguard Growth ETF (VUG)
The Vanguard Growth ETF (VUG) focuses on large-cap growth stocks for those with a higher risk tolerance. These companies typically have strong earnings growth potential, which can lead to higher returns. It’s ideal for investors looking to capitalize on growth opportunities within their Roth IRA.
4-Vanguard Dividend Appreciation ETF (VIG)
The Vanguard Dividend Appreciation ETF (VIG) targets companies with a history of increasing dividends. This focus on dividend growth offers a mix of income and capital appreciation, making it a balanced choice for long-term investors seeking stability and growth in their Roth IRA.
Benefits of Vanguard ETFs Funds
Now, you might wonder, what makes Vanguard ETFs stand out from other investment options? Well, let’s take a look at some of the benefits:
1. Low Expense Ratios
Vanguard is known for its commitment to low-cost investing. The expense ratios of their ETFs are among the lowest in the industry. This means you get to keep more investment returns, as less money is paid towards management fees.
2. Broad Market Exposure
Vanguard ETFs expose investors to a wide range of markets and asset classes. Whether you’re interested in domestic or international stocks, bonds, or even real estate, Vanguard covers you. This allows you to build a well-diversified portfolio without picking individual stocks.
3. Passive Investing
Vanguard ETFs are passively managed, which means that they aim to replicate the performance of a specific market index. This strategy eliminates the need for active stock picking and market timing, which can be challenging even for seasoned investors. Investing in Vanguard ETFs allows you to take advantage of long-term market trends and reduce the risk of making costly investment mistakes.
Best Performing Vanguard ETFs last 10 years
VGT has been a standout performer, benefiting from the tech sector’s explosive growth. It exposes leading tech companies like Apple, Microsoft, and NVIDIA.
Vanguard Consumer Discretionary ETF (VCR)
Driven by strong consumer spending and the rise of e-commerce giants like Amazon, VCR has delivered impressive returns, reflecting the sector’s resilience and innovation.
Vanguard Growth ETF (VUG)
VUG has excelled by focusing on high-growth companies across various sectors. Its portfolio includes tech heavyweights, contributing to its robust performance.
Vanguard Total Stock Market ETF (VTI)
As a broad-market fund, VTI has consistently performed well, reflecting the overall strength of the U.S. stock market. Its diversified holdings span large, mid, and small-cap stocks.
These ETFs have thrived due to sector-specific booms, technological advancements, and strong consumer trends, making them top picks for long-term growth.
What Vanguard Etf Pays the Highest Dividend
The Vanguard ETF that pays the highest dividend is the Vanguard International High Dividend Yield ETF (VYMI). As of recent data, VYMI has a dividend yield of approximately 4.7%. This ETF aims to track the performance of the FTSE All-World ex-US High Dividend Yield Index, which includes companies outside the United States that are forecasted to have above-average dividend yields.
Another high-yield option is the Vanguard High Dividend Yield ETF (VYM), which has a dividend yield of around 3.5%. This ETF tracks the FTSE High Dividend Yield Index and focuses on large-cap U.S. stocks known for their high dividend yields.
VYMI and VYM are popular choices for investors seeking income through dividends while maintaining diversified equity exposure.
Comparison between Vanguard vs. Fidelity
Vanguard and Fidelity are two of the world’s largest and most well-regarded investment management firms. Vanguard is renowned for its low-cost index funds and ETFs, emphasizing passive investing strategies. The firm is owned by its funds, which means it operates at cost and aims to keep fees as low as possible.
Vanguard’s user-friendly platform and comprehensive educational resources make it an attractive choice for long-term, cost-conscious investors. The company also offers a wide range of ETFs and mutual funds that cover various asset classes, sectors, and regions, providing ample opportunities for portfolio diversification.
On the other hand, Fidelity offers a broad range of investment products and services, including mutual funds, ETFs, brokerage services, retirement accounts, and financial planning. Fidelity is particularly known for its actively managed funds, which can appeal to investors seeking to outperform the market through professional management. The firm has also been a technology and customer service leader, providing a robust trading platform with advanced tools and features.
Is Vanguard Etf Worth Buying for Long Term
Diversification is a fundamental principle in investment strategy, aiming to spread risk across various asset classes to minimize the impact of any single investment’s poor performance. By diversifying, investors can protect their portfolios from significant losses and ensure more stable returns. Vanguard offers a wide range of ETFs that cover various sectors, asset classes, and geographical regions, enabling investors to build a well-rounded portfolio.
Long-term growth is another critical aspect of successful investing. Markets can be volatile in the short term, but they tend to rise over the long haul. Investing in diversified ETFs focusing on long-term growth can help investors withstand market fluctuations and achieve substantial returns.
Conclusion
Investing in international markets can be a strategic move to diversify your portfolio and protect against domestic market volatility. Vanguard offers a variety of ETFs that provide broad exposure to international stocks and bonds, making it easier for investors to access global markets.
The best Vanguard Total International Stock ETF (VXUS) and the Vanguard Total International Bond ETF (BNDX) are excellent options for investing overseas. These ETFs offer a diversified investment in a single package, holding thousands of non-U.S. stocks and bonds. By incorporating these ETFs into your investment strategy, you can achieve a well-rounded portfolio that spans multiple regions and sectors, ultimately enhancing your potential for long-term growth.
Frequently Asked Questions
What is the Vanguard Total International Stock ETF (VXUS)?
The Vanguard Total International Stock ETF (VXUS) provides broad exposure to international markets by holding over 6,000 non-U.S. stocks. It aims to track the performance of the FTSE Global All Cap ex-U.S. Index.
How does the Vanguard FTSE All-World ex-US Index ETF (VEU) differ from VXUS?
While both ETFs provide exposure to international stocks, VEU tracks the FTSE All-World ex-US Index, which includes large and mid-cap stocks from developed and emerging markets outside the U.S., whereas VXUS includes small-cap stocks.
What are the benefits of investing in the Vanguard FTSE All-World ex-US Small Cap ETF (VSS)?
The Vanguard FTSE All-World ex-US Small Cap ETF (VSS) focuses on small-cap stocks outside the U.S., offering diversification benefits and potential for higher growth than large-cap stocks.
Is the Vanguard Total World Stock ETF (VT) a good option for international diversification?
Yes, the Vanguard Total World Stock ETF (VT) provides exposure to U.S. and international stocks, making it a comprehensive option for global diversification.
What makes the Vanguard Emerging Markets Stock Index ETF (VWO) unique?
The Vanguard Emerging Markets Stock Index ETF (VWO) targets stocks in emerging markets, exposing investors to higher growth potential regions such as China, India, and Brazil.
How does the Vanguard International Dividend Appreciation ETF (VIGI) work?
The Vanguard International Dividend Appreciation ETF (VIGI) focuses on international companies with a history of increasing dividends over time, offering a combination of growth and income potential.
