Vanguard Total Stock Market Admiral
- Expenses: 0.04%
- Vanguard Total Stock Market Index Admiral , $72.06) is the only index fund on this list, and thats because its both one of the best indexed Vanguard funds and a great fit for retirees. It even boasts a long-term performance edge against Vanguard 500 Index Fund Admiral ). Over the past decade, VTSAXs annual average performance has topped the Standard & Poors 500-stock index tracker by 10 basis points .
The S& P 500 and VFIAX invest in a roughly 90%-10% mix of large caps and mid-caps. Total Stock Market covers much more of the stock market, with its 3,600-plus holdings invested across large caps , mid-caps and smaller companies . That said, larger companies still command the largest weights in both fund, so their top holdings are virtually identical, including the likes of Microsoft ), Apple ) and Amazon.com ).
VTSAX has an affordable minimum initial investment of $3,000. The expense ratio is a mere 0.04% annually, or just $4 for every $10,000 invested. Very little portfolio turnover helps keep costs low, too Total Stock Market trades a tiny 3% of its assets, on average, every year.
Note: This fund also is available as an exchange-traded fund under the symbol VTI .
Vanguard Windsor Mutual Fund
The Vanguard Windsor Mutual Fund is a great fund for those who are just starting to build their retirement investing portfolios. The fund is made up of large-cap stocks. In particular, the fund managers at VWNDX are working to buy stocks that the market has undervalued in hopes of an outsize long-term return.
Due to the value investing nature of the VWNDX, it is not fit for those nearing retirement, as the mutual fund exposes investors to short-term volatility risks.
Nonetheless, high-quality value stocks have made plenty of millionaires, and with the VWNDX, those just starting out in terms of retirement investing have the time horizon necessary to take advantage of this type of potential.
As yet another of Vanguards older, more seasoned mutual funds, the VWNDX is a strong pick for the right retirement portfolio.
VWNDX Key Stats
Although the VWNDX has a higher expense ratio than most Vanguard funds on this list, it has a strong history of stellar performance, as can be seen below:
- Expense Ratio: 0.29%
- Morningstar Return Rating: 4 out of 5
- Years Up Since Inception: 49
- Years Down Since Inception: 13
- Best Three-Year Total Return: 36.08%
- Worst Three-Year Total Return: Negative 12.07%
The Difference Between An Index Fund And A Mutual Fund
First, lets quickly discuss an Index Fund and a mutual fund. Who better to ask than Vanguard themselves?
An ETF is a collection of tens, hundreds, or sometimes thousands of stocks or bonds in a single fund. If youve ever owned a mutual fundparticularly an index fundthen owning an ETF will feel familiar because it has the same built-in diversification and low costs.
A Mutual Fund is very similar to an ETF with one crucial difference:
You can set up automatic investments and withdrawals into and out of mutual funds based on your preferences.
Source: Vanguard on ETF vs. Mutual Fund
In other words, if you are a beginner or want to automate your investing, then you use a Mutual Fund. If you want cheaper fees over time and dont mind making contributions every month, then you should choose an ETF. I use ETFs because I dont mind making investments manually, and fees are the worst.
We often get asked how much we need to invest in Vanguard. If youre investing in a Vanguard ETF, it will cost you the price of one share (Vanguard ETFs typically cost between $50 to several hundred dollars. If youre investing in a Vanguard Mutual Fund, then the minimum initial investment is between $1,000 and $3,000.
Vanguard Total Stock Market Index
Vanguard’s VTSAX is the largest mutual fund in the world. It’s a diversified stock index fund. Its expenses are very low. The portfolio provides exposure to the entire U.S. stock market, including small-, mid-, and large-cap stocks. This mix includes over 3,500 securities. The expenses are only 0.04% or $4 for every $10,000 invested. The minimum initial investment is $3,000 for Admiral Shares.
Vanguard’s VTSAX are available as Vanguard Total Stock Market ETF , with a 0.03% expense ratio.
Vanguard Target Retirement 2030 Fund
The Vanguard Target Retirement 2030 Fund is designed for investors who wish to retire between 2028 and 2032, and its minimum initial investment is $1,000.
The fund was issued on June 7, 2006, and has achieved an average annual return of 7.68% since its inception. Its expense ratio is 0.14%, which is 69% lower than the average expense ratio of similar funds, according to Vanguard.
As of May 31, 2021, the net assets of the fund were $41.9 billion, of which about 65% were held in stocks and 35% in bonds. The fund had a 17% annual turnover ratio in the 2020 fiscal year.
The Vanguard Target Retirement 2030 Fund is considered a moderate-to-aggressive fund. However, the allocation of assets in the fund will change as the target date approaches, and it will become more conservative over time. This makes the fund most suitable for people who want to invest in it for 10 years or longer.
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Fees And Expenses At Vanguard Star Fund
Vanguard STAR Fund’s annual expenses are quite reasonable, although they’re actually somewhat on the high side for Vanguard. The shares carry an expense ratio of 0.34%, which is less than half the average among balanced funds. The fund also carries no 12b-1 marketing fees.
In addition, like all Vanguard funds, Vanguard STAR doesn’t charge a sales load. The fund also avoids purchase fees and redemption fees, and the only ancillary charges are account service fees for accounts with balances of less than $10,000 in the fund. However, you can also avoid this last fee if you sign up for electronic delivery of materials related to your account.
Image source: Getty Images.
Vanguard 500 Index Fund
Five-year annual average return: 14.06 percent
Average annual return since inception: 11.01 percent
Expense ratio: 0.14 percent
The Vanguard 500 Index Fund seeks to emulate the returns of the Standard & Poors 500 index. By offering exposure to 500 of the largest stocks in the U.S., this mutual fund can be a core holding in any retirement plan. And with an expense ratio of just 0.14 percent, you dont have to worry about fees eating up your returns.
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Vanguard Target Retirement 2040 Fund
The Vanguard Target Retirement 2040 Fund is best suited for investors planning to retire between 2038 and 2042, and its minimum initial investment is $1,000.
The fund was issued on June 7, 2006, and has generated an average annual return of 8.32% since its inception. According to Vanguard, the fund also has an annual expense ratio of just 0.14%. The fund has $33.1 billion in net assets, of which about 80% are held in stocks and 20% are held in bonds.
The Vanguard Target Retirement 2040 Fund is also considered a moderate-to-aggressive fund. However, as with the 2030 fund, the Vanguard Target Retirement 2040 Fund will become more conservative over time as the allocation of assets in the fund change. Similarly, this fund is also best for people who want to invest for 10 years or more.
Which Target Retirement Fund Fits Your Timeline
Use our table to find the fund that best fits you.
*Vanguard Target Retirement Funds average expense ratio: 0.11%. Industry average expense ratio for comparable target-date funds: 0.49%. All averages are asset-weighted. Industry averages exclude Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2021.
Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date.
These fund suggestions are based on an estimated retirement age of approximately 65. Should you choose to retire significantly earlier or later, you may want to consider a fund with an asset allocation more appropriate to your particular situation.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. Investments in bonds are subject to interest rate, credit, and inflation risk.
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Vfiax: The Only Other Vanguard Fund You Need From Cradle To Grave
The second index fund you should buy after VSTAX is the VFIAX, or Vanguard S& P 500 Index Fund.
This fund tracks the largest 500 public companies in the U.S.
|Low fees, broad diversification|
|Avg. annual return ending 2018||Since 2000: 6.45% Since 2008: 11.95% Since 2013: 13.91% Since 2015: 17.27% Since 2017: 17.87%|
Heres a little secret: VTSAX and VFIAX are 75% the same because the 500 largest companies own 75% the entire U.S. stock market.
VTSAX is slightly riskier than VFIAX but should give you marginally better returns over a long period. If youre more conservative or care more about preserving your wealth rather than growing it, then VFIAX is a better choice.
If I had to choose one out of the two, Id pick VTSAX because I want to grow my money, but when Warren Buffett is asked what hed recommend his kids do with his money, he recommends the Vanguard S& P 500. Buffett explains:
A low-cost fund is the most sensible equity investment for the great majority of investors. If you periodically deposit your money into the Vanguard S& P 500, you can outperform most investment professionals.
If you are wealthy, consider the S& P 500 because it is more stable. But for most of us, there is nothing wrong with investing in both funds! I do that for myself and my parents.
The 5 Best Vanguard Funds For Retirees
Vanguard, with more than $5 trillion in global assets under management, is the worlds largest mutual fund provider and for good reason.
Vanguard funds pioneered index investing and, since its founding in the 1970s by the late Jack Bogle, have emphasized low costs. Organized like a mutual insurance company, Vanguards funds are owned by fund shareholders and run at-cost. Theres no need to turn a profit to satisfy outside investors.
Any time Im tasked with covering Vanguard funds, Im a happy guy. Very few Vanguard funds havent done right by investors, but Vanguard is especially good for those in retirement. Retirees, after all, dont want to take outsize risks in their investing, and Vanguards managers arent encouraged to take big gambles. Low costs remove a lot of the pressure on managers to take extra risk in the hopes of squeezing out a little more profit.
Here are my five best Vanguard funds for retirees. This list heavily emphasizes active management . Several of my picks also are recommended by Dan Wiener, editor of the The Independent Adviser for Vanguard Investors newsletter.
Says Wiener: Find a good manager at Vanguard, and youll find a fund that will outperform its benchmark and comparable Vanguard index funds.
Data is as of April 17. Yields represent the trailing 12-month yield, which is a standard measure for equity funds.
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Vanguard Target Retirement 2055 Fund
As a retirement fund, VFFVX is focused on heavy diversification and adjusting the portfolio to reduce risk over time. Instead of making single-stock investments, VFFVX is an investment in a collection of multiple Vanguard funds. In particular, an investment in the VFFVX is an investment in:
As a target retirement fund, this funds investments will slowly shift away from stocks and into bonds, reducing risk as the time to retirement narrows.
VFFVX Key Stats
When considering an investment in a fund, there are several key stats in terms of expenses and returns that you should dive into before making your investment. Heres what you need to know in the case of the Vanguard Target Retirement 2055 Fund.
- Expense Ratio: 0.15%
- Morningstar Return Rating: 4 out of 5
- Years Up Since Inception: 7
- Years Down Since Inception: 3
- Best Three-Year Total Return: 24.98%
- Worst Three-Year Total Return: 4.68%
Who Manages Vanguard Star Fund
Vanguard STAR Fund’s officers and trustees manage the allocation of the fund. The Vanguard Equity Index Group, led by Joseph Brennan, is ultimately responsible for the equity funds that Vanguard STAR owns, while Chief Investment Officer Mortimer Buckley looks over the company’s Fixed Income Group.
Two managers have direct oversight over the fund, William Coleman and Walter Nejman. Both have been with the fund since 2013.
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Best Vanguard Funds For Every Stage Of Your Life
posted on 4:42 am
Youve heard Vanguard funds are the best. But why? Which Vanguard fund is right for you?
In this guide, Ill identify the best Vanguard funds for every stage of your life, from college grads to seniors.
Whether you want to grow your investment or protect your retirement, Ill show you the ideal Vanguard fund based on data.
The Best Vanguard Funds For Retirees
Gordon Scott has been an active investor and technical analyst of securities, futures, forex, and penny stocks for 20+ years. He is a member of the Investopedia Financial Review Board and the co-author of Investing to Win. Gordon is a Chartered Market Technician . He is also a member of CMT Association.
Are you getting your finances ready for retirement? Some of the best Vanguard funds are great choices for retirees.
Once you retire, your investment goals are likely to shift more toward income and stability. Growth is often a lesser priority. But retirees live longer than they used to. Even if you are in your 60s when you retire, you may live another 20 or 30 years.
You’ll need to invest for short- and intermediate-term income after you retire. But you’ll also need long-term growth for the next few decades.
These funds can help you manage your finances, not just before retirement, but also once you are retired.
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Best Vanguard Retirement Funds
Investing for retirement can be complicated and nerve-wracking. Figuring out how to use your 401k and IRA are tricky enough, but choosing stocks to fund your golden years involves a whole different skill set. Plus, learning how to invest well in stocks takes time you might not have.
Well-known for its low-cost mutual funds, Vanguard includes choices that make good investments for an investors retirement savings. Heres what you need to know about the best Vanguard mutual funds for your situation, so you can take the guesswork out of investing for retirement.
Vanguard Utilities Index Admiral Shares
This fund focuses on stocks in the utility sector, which tend to have high dividends. It mostly holds large-cap stocks of U.S. utility companies, such as Duke Energy Corporation and Southern Company .
The expense ratio for VUIAX is a low 0.10%. However, it is only offered in Vanguard’s “Admiral” share class, which has a minimum initial purchase of $100,000.
If you can’t afford to invest in VUIAX, you can try Vanguard’s utility ETF . Its symbol is VPU, and it has no minimum to invest.
Keep in mind that dividend mutual funds often pay high yields. But these funds also come with the risk that your investment may lose value instead.
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Minimalist Funds For Accumulators: The Building
Retirement savers who would like to maintain control over their portfolios allocations cant go too far wrong with the low costs and broad diversification that accompanies index funds and exchange-traded funds. Several traditional index funds garner top ratings from Morningstar analysts most core index funds reside in the large-cap blend, foreign large-blend, intermediate core bond, and intermediate core-plus bond Morningstar Categories.
Of course, active funds can serve as worthy core holdings for accumulators, too, though investors must understand and be comfortable with their style biases in order to ride out their inevitable bouts of underperformance relative to the broad market. Funds such as Dodge & Cox Stock DODGX, Oakmark OAKMX, and the various Primecap-managed funds are good examples.
Minimalist Funds For Retirees: Single
The target-date retirement category, a subset of the target-date universe, is home to several worthwhile multi-asset funds geared toward retirees. BlackRock LifePath Index Retire LIRKX and Vanguard Target Retirement Income VTINX receive Gold and Silver ratings, respectively, from Morningstars analyst team. Target-date funds take different tacks when the target date hits some flatline their equity allocations, while others continue to change the portfolios allocations.
Static-allocation funds can make sense for retirees, too. Vanguard LifeStrategy Conservative Growth VSCGX and Vanguard Wellesley Income VWINX are two Gold-rated options that fall into the allocation30% to 50% equity category. Retirees who desire higher equity allocations can look to fine options such as Vanguard LifeStrategy Moderate Growth VSMGX.
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Vanguard Equity Income Fund
Five-year annual average return: 13.27 percent
Average annual return since inception: 10.30 percent
Expense ratio: 0.26 percent
Like the high-dividend yield fund, the Vanguard Equity Income Fund seeks income from dividend-paying stocks. The result is another fund that provides income while still providing exposure to the stock market for long-term growth. Retirement investors can use this fund instead of the high-dividend fund, or in tandem as a way to get more diversification in their equity income holdings.