Vanguard pioneered low-cost index investing and its funds remain the benchmark for cost-efficient long-term investing. The best Vanguard funds for most investors are VTSAX or VTI (US total market), VXUS (international), and BND (bonds) — a three-fund global portfolio costing an average of roughly 0.05% per year, or $50 annually on $100,000.
Key fact: The Vanguard Total Stock Market ETF (VTI) covers approximately 3,600 US companies at a 0.03% expense ratio — $30 per year on $100,000.
Core Vanguard Funds at a Glance
| Fund | Ticker | Type | Expense Ratio | Minimum | What It Tracks |
|---|---|---|---|---|---|
| Total Stock Market ETF | VTI | ETF | 0.03% | ~1 share | CRSP US Total Market |
| Total Stock Market Admiral | VTSAX | Mutual | 0.03% | $3,000 | CRSP US Total Market |
| S&P 500 ETF | VOO | ETF | 0.03% | ~1 share | S&P 500 |
| S&P 500 Admiral | VFIAX | Mutual | 0.04% | $3,000 | S&P 500 |
| Total International ETF | VXUS | ETF | 0.07% | ~1 share | FTSE Global All Cap ex US |
| International Admiral | VTIAX | Mutual | 0.11% | $3,000 | FTSE Global All Cap ex US |
| Total Bond Market ETF | BND | ETF | 0.03% | ~1 share | Bloomberg US Aggregate |
| Total Bond Market Admiral | VBTLX | Mutual | 0.05% | $3,000 | Bloomberg US Aggregate |
| LifeStrategy Growth | VASGX | Mutual | 0.14% | $1,000 | 80% stock / 20% bond mix |
| Target Retirement 2045 | VTIVX | Mutual | 0.08% | $1,000 | Auto-adjusts by retirement date |
VTI vs. VOO: Which Should You Hold?
Both are excellent funds at 0.03% expense ratios. The choice comes down to how much diversification you want:
| VTI | VOO | |
|---|---|---|
| Companies | ~3,600 | 500 |
| Market cap coverage | Large + mid + small | Large cap only |
| Top 10 holdings | Same (Apple, Microsoft, Nvidia, etc.) | Same |
| 10-year performance | Nearly identical | Nearly identical |
| Expense ratio | 0.03% | 0.03% |
The practical difference is small. The largest 500 companies (S&P 500) account for about 84% of VTI’s weight, so VOO and VTI move very similarly. For broad diversification, VTI is slightly preferable. If you want pure S&P 500 exposure to mirror the index everyone quotes, VOO is the right choice.
The Vanguard Three-Fund Portfolio
The three-fund portfolio is the most widely recommended simple investing strategy among financial independence communities and evidence-based investors:
| Fund | Sample Allocation | What It Does |
|---|---|---|
| VTI (US stocks) | 60% | Broad US market exposure |
| VXUS (international) | 30% | Diversification outside the US |
| BND (bonds) | 10% | Stability and reduced volatility |
Adjust the bond allocation based on your time horizon: younger investors can hold 5–10% bonds; those 10 years from retirement might hold 20–30%; those in retirement often hold 30–50%.
Average expense ratio of this portfolio: approximately 0.04% — or $40 per year on $100,000.
Worked Example: 30 Years at the Three-Fund Cost
Starting with $10,000 and contributing $500/month at an assumed 7% annual return, over 30 years:
| Scenario | Expense Ratio | 30-Year Balance | Total Fees Paid |
|---|---|---|---|
| Vanguard 3-Fund | 0.04% | ~$605,000 | ~$3,500 |
| Average active fund | 1.00% | ~$519,000 | ~$88,000 |
| Difference | — | +$86,000 | -$84,500 |
The $86,000 difference in terminal wealth is entirely attributable to the fee gap compounding over 30 years.
Vanguard LifeStrategy and Target Retirement Funds
For investors who want a complete portfolio in a single fund:
LifeStrategy Funds — Fixed allocation, rebalanced automatically:
- LifeStrategy Income (VASIX): 20% stock / 80% bond, 0.11%
- LifeStrategy Conservative Growth (VSCGX): 40% / 60%, 0.12%
- LifeStrategy Moderate Growth (VSMGX): 60% / 40%, 0.13%
- LifeStrategy Growth (VASGX): 80% / 20%, 0.14%
Target Retirement Funds — Allocation shifts automatically as retirement approaches:
- Gradually moves from stock-heavy to bond-heavy as target date nears
- Average expense ratio: 0.08–0.15%
- Available for retirement dates from 2025 to 2065+
Both are excellent options for investors who want minimal management. Target Retirement funds are especially useful inside a Roth or Traditional IRA at Vanguard.
Where to Buy Vanguard Funds
| Platform | VTI/VOO/BND ETFs | VTSAX/VFIAX Mutual Funds |
|---|---|---|
| Vanguard directly | Yes | Yes ($3,000 min) |
| Fidelity | Yes (free) | Yes (commission may apply) |
| Schwab | Yes (free) | Yes (commission may apply) |
| Other brokerages | Yes | Varies |
You do not need to hold Vanguard ETFs at Vanguard. VTI and VOO trade on all major brokerages for $0 commission. Holding VTI in a Fidelity IRA or Schwab IRA is perfectly valid — and at Fidelity you can even buy fractional shares of VTI starting from $1.
For the full Vanguard brokerage overview, see the Vanguard review. To compare options across all platforms, see our best brokerage accounts guide.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy