With more than $7 trillion in assets, Vanguard dominates the mutual fund and exchange-traded fund landscape in the United States. The asset manager is a go-to choice for long-term investors for many reasons:
- Vanguard funds tend to be low in cost. Vanguard has built its reputation as a low-cost asset manager, and it remains one of the industry’s lower-cost providers.
- Vanguard funds generally pursue simple, reliable strategies. Vanguard’s brand is synonymous with index funds, which, by their very nature, are simple in their approaches and reliable in their performances.
- Long-term investors can easily build well-diversified portfolios exclusively of top-rated Vanguard mutual funds or ETFs. Vanguard covers the bases with excellent choices among the three main asset classes: U.S. stocks, international stocks, and bonds. It also excels when it comes to more tightly defined strategies, boasting highly rated style-specific, dividend-stock, real estate, and inflation bond funds.
Morningstar’s list of the best Vanguard mutual funds and ETFs for long-term investors to buy and hold in 2023 features top-rated funds that we expect to outperform their competitors over a full market cycle. Investors can confidently buy and hold these funds in a long-term portfolio.
Best Vanguard Index Funds to Buy: Stocks
These Vanguard index mutual funds and ETFs investing in stocks have at least one share class that earns a Morningstar Medalist Rating of Gold with 100% analyst coverage, as of September 2023.
- Vanguard Dividend Appreciation Index/ETF VDADX VIG
- Vanguard European Stock Index/FTSE Europe ETF VEUSX VGK
- Vanguard FTSE All-World ex-US Index/ETF VFWAX VEU
- Vanguard FTSE All-World ex-US Small Cap ETF VSS
- Vanguard Growth Index/ETF VIGAX VUG
- Vanguard International Dividend Appreciation Index/ETF VIAAX VIGI
- Vanguard Large Cap Index/ETF VLCAX VV
- Vanguard Mid-Cap Index/ETF VIMAX VO
- Vanguard Mid-Cap Growth Index/ETF VMGMX VOT
- Vanguard Mid-Cap Value Index/ETF VMVAX VOE
- Vanguard Real Estate Index/ETF VGSIX VNQ
- Vanguard Russell 1000 Growth Index/ETF VRGWX VONG
- Vanguard Russell 1000 Index VRNIX
- Vanguard Russell 1000 Value Index VRVIX
- Vanguard S&P 500 Growth Index/ETF VSPGX VOOG
- Vanguard S&P 500 Index/ETF VFIAX VOO
- Vanguard S&P Mid-Cap 400 Growth Index VMFGX
- Vanguard S&P Mid-Cap 400 Index/ETF VSPMX IVOO
- Vanguard S&P Mid-Cap 400 Value Index VMFVX
- Vanguard S&P Small Cap 600 Value Index VSMVX
- Vanguard Small Cap Growth Index/ETF VSGAX VBK
- Vanguard Small Cap Index/ETF VSCIX VB
- Vanguard Small-Cap Value Index/ETF VSIAX VBR
- Vanguard Total International Stock Index/ETF VTIAX VXUS
- Vanguard Total Stock Market Index/ETF VTSAX VTI
- Vanguard Total World Stock Index/ETF VTWAX VT
- Vanguard Value Index/ETF VVIAX VTV
This list of Vanguard’s top index funds to buy that invest in stocks includes a good deal of variety. Some of the funds invest around the globe while others favor U.S. stocks. Others track indexes based on market capitalization (mid- or small-cap stocks) or investment style (growth stocks or value stocks)—or both. To fully understand a fund’s strategy, be sure to read its Morningstar Fund Analyst Report. There are all the building blocks here to create a well-diversified, buy-and-hold, low-cost equity portfolio.
Best Vanguard Index Funds to Buy: Bonds
These Vanguard index mutual funds and ETFs investing in bonds have at least one share class that earns a Morningstar Medalist Rating of Gold with 100% analyst coverage, as of September 2023.
- Vanguard Intermediate-Term Corporate Bond Index/ETF VICSX VCIT
- Vanguard Long-Term Bond Index/ETF VBLLX BLV
- Vanguard Long-Term Corporate Bond Index/ETF VLTCX VCLT
- Vanguard Short-Term Corporate Bond Index/ETF VSTBX VCSH
- Vanguard Short-Term Inflation-Protected Securities Index/ETF VTAPX VTIP
- Vanguard Short-Term Treasury Index/ETF VSBSX VGSH
- Vanguard Tax-Exempt Bond Index/ETF VTEAX VTEB
- Vanguard Total Bond Market Index/ETF VBTIX BND
Vanguard’s top bond index funds to buy for the long term run the gambit, with solid choices investing in taxable bonds of varying types and maturities—and even include tax-free and inflation-protected bond funds. Here, too, most investors will find the low-cost building blocks they need to balance out an equity-heavy portfolio.
Best Vanguard Active Funds to Buy and Hold
These Vanguard active funds investing in stocks, bonds, or some combination of the two have at least one share class that earns a Morningstar Medalist Rating of Gold with 100% analyst coverage, as of September 2023.
- Vanguard California Intermediate-Term Tax-Exempt Bond VCADX
- Vanguard California Long-Term Tax-Exempt Bond VCLAX
- Vanguard Capital Opportunity VHCOX
- Vanguard Dividend Growth VDIGX
- Vanguard High-Yield Tax-Exempt Bond VWALX
- Vanguard Intermediate-Term Tax Exempt Bond VWITX
- Vanguard Long-Term Tax Exempt Bond VWLUX
- Vanguard Limited-Term Tax Exempt Bond VMLUX
- Vanguard Primecap Core VPCCX
- Vanguard Primecap VPMCX
- Vanguard Tax-Managed Capital Appreciation VTCLX
- Vanguard Ultra Short-Term Tax-Exempt Bond VWSUX
- Vanguard Wellesley Income VWINX
- Vanguard Wellington VWELX
Although Vanguard may be best known today for its comprehensive and highly rated suite of index funds, the asset manager lays claim to several excellent actively managed funds, too, across all asset classes.
Vanguard’s active funds to buy and hold are managed by various well-respected subadvisors, including Primecap and Wellington Investment Management, among others. Like Vanguard’s passive funds, the highly rated members of this active fund lineup charge modest fees.
How to Find More Top Vanguard Funds to Buy and Hold
Of course, focusing only on Vanguard funds that earn a Gold rating may be too limiting for some long-term investors. Those who’d like to consider Vanguard funds beyond of our top rating can:
- Visit Morningstar’s asset-management company hub for Vanguard. Once there, review lists of Vanguard mutual funds and ETFs, and segment those lists by criteria such as active or passive, stock or bond, and more.
- Build your own Vanguard mutual fund and ETF screen using the Morningstar Investor Screener tool. Beneath Investment Type, choose either mutual fund or ETF; type “Vanguard” as the keyword. Then drill down further based on asset class, Morningstar Category, ratings, and other metrics that matter to you.
The author or authors own shares in one or more securities mentioned in this article. Find out about Morningstar’s editorial policies.