The Best Vanguard ETFs to Invest $50,000 in Now

By | February 27, 2024

Investing can be difficult. There are thousands of investment products – and not all of them are equally good. One asset class worth considering is exchange-traded funds (ETFs). For many investors, ETFs are a smart choice thanks to their diverse stock holdings, solid performance and low costs.

Here I’ll break down a hypothetical $50,000 portfolio, spread evenly across five different ETFs offered by Vanguard. Let’s start.

Vanguard Information Technology ETF

First up is the Vanguard Information Technology ETF (NYSEMKT: VGT). With a 10-year total return of 531% and a compound annual growth rate (CAGR) of 20%, it’s hard to find a Vanguard ETF with a better performance history. The fund’s top holdings are Microsoft, Apple, Nvidia, BroadcomAnd Adobe.

Company Name

Symbol

Percentage of assets

Microsoft

MSFT

20.5%

Apple

AAPL

20.2%

Nvidia

NVDA

5.1%

Broadcom

AVGO

4%

Adobe

ADBE

2.2%

Data source: Vanguard Group

The 0.10% expense ratio means you only pay $10 annually for every $10,000 you invest. Due to the high exposure to technology, this is not an ETF for every portfolio. But it’s certainly something to consider for most investors.

Vanguard Growth ETF

Next is the Forefront Grow ETF (NYSEMKT: VUG). This ETF has a lot of large cap growth stocks, meaning it’s full of ‘Magnificent Seven’ stocks like Microsoft, Apple, Nvidia, AlphabetAnd Amazon.

Company Name

Symbol

Percentage of assets

Microsoft

MSFT

13.2%

Apple

AAPL

12.2%

Nvidia

NVDA

6.5%

Amazon

AMZN

6.5%

Metaplatforms

META

3.9%

Data source: Vanguard Group

Given the focus on growth stocks, there aren’t many dividends; the ETF has a dividend yield of just 0.6%. In terms of performance, the Vanguard Growth ETF has outperformed the average over the past decade, delivering a total return of 295% to its investors, which represents a CAGR of almost 15%.

Furthermore, with a small expense ratio of 0.05%, investors only give up $5 in fees for every $10,000 invested. In short, this is an ETF that growth-oriented investors should strongly consider.

Vanguard S&P 500 ETF

For investors who want to track the performance of the S&P500 with a low expense ratio, the Forefront S&P500 ETF (NYSEMKT: VOO) is a name to remember. The ETF has a minuscule expense ratio of 0.03%.

Because it tracks the S&P 500, its weighting currently reflects the top-heavy, tech-focused nature of the S&P 500, with Magnificent Seven stocks dominating the top holdings list.

Company Name

Symbol

Percentage of assets

Microsoft

MSFT

7.3%

Apple

AAPL

6.6%

Nvidia

NVDA

3.7%

Amazon

AMZN

3.5%

Metaplatforms

META

2.1%

Data source: Vanguard Group

Yet the company also has other, more value-oriented names. For example, healthcare and financial services stocks each represent approximately 13% of the fund’s total investments.

With this ETF you won’t outperform the market, but you will shall replicate his performance. And thanks to these very low fees, investors in this ETF won’t give up an arm and a leg for it.

Vanguard Total Stock Market ETF

Then there is the Vanguard Total Stock Market ETF (NYSEMKT: VTI). This is the “kitchen sink” ETF. It has a little bit of everything. Of course, the Magnificent Seven stocks are on the top holdings list, but beneath the surface there are many other stocks and sectors included.

Company Name

Symbol

Percentage of assets

Microsoft

MSFT

6.3%

Apple

AAPL

5.8%

Nvidia

NVDA

3.1%

Amazon

AMZN

3.1%

Meta platform

META

1.8%

Data source: Vanguard Group

Cyclical consumer stocks and industrial stocks comprise 11% and 10% of the holdings, respectively. Plus, the 1.4% dividend yield, while still modest, gives income-oriented investors something to chew on. Like other Vanguard funds, this ETF has a low expense ratio of 0.04%.

Vanguard Value ETF

Finally, there is the Forefront Value ETF (NYSEMKT: VTV). Because value stocks have underperformed growth over the past decade, this ETF’s 10-year CAGR of 10% has underperformed the market as a whole. Still, performance isn’t bad, and it’s worth having some exposure to value stocks in almost any portfolio.

The fund holds shares from multiple sectors. Nearly 21% of equity ownership consists of financial services stocks, while another 18% goes to healthcare. Top positions include Berkshire Hathaway, Proctor & Gamble, Exxon Mobile, MerckAnd JPMorgan Chase.

Company Name

Symbol

Percentage of assets

Berkshire Hathaway

BRK.B

3.7%

Broadcom

AVGO

2.8%

JPMorgan Chase

JPM

2.7%

UnitedHealth Group

UNH

2.5%

ExxonMobil

XOM

2.2%

Data source: Vanguard Group

In addition to the fund’s focus on value stocks, it also has the highest dividend yield of the five Vanguard ETFs covered. The fund boasts a dividend yield of 2.43%, and like the other Vanguard ETFs discussed above, its low 0.04% expense ratio means only a few dollars per year are lost in fees.

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Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jake Lerch holds positions at Adobe, Alphabet, Amazon, Nvidia and Procter & Gamble. The Motley Fool holds and recommends Adobe, Alphabet, Amazon, Apple, Berkshire Hathaway, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, Vanguard Index Funds-Vanguard Growth ETF, Vanguard Index Funds-Vanguard Total Stock Market ETF, Vanguard Index Funds to -Vanguard Value ETF and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom and UnitedHealth Group and recommends the following options: long calls for $395 in January 2026 at Microsoft and short calls in January 2026 for $405 at Microsoft. The Motley Fool has a disclosure policy.

The Best Vanguard ETFs to Invest $50,000 in Right Now was originally published by The Motley Fool

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