*If you’re here from my video, you can find the Vanguard ETF Cheatsheet at the bottom of this article.

When it comes to selecting exchange-traded funds (ETFs), Vanguard consistently ranks among the top choices for investors. Known for their low expense ratios and a broad range of asset classes, Vanguard ETFs are ideal for both novice and seasoned investors. In this article, we’ll focus on some of the best-performing Vanguard ETFs, each categorized by their sector or investment style, and explore key metrics like performance, expense ratios, and yield over the last five years, as compiled in the cheat sheet.

Why Choose Vanguard ETFs?

Before diving into the best-performing Vanguard ETFs, it’s essential to understand why Vanguard ETFs are a popular choice. Vanguard’s commitment to low-cost investing and its focus on long-term performance has positioned them as one of the leaders in the ETF market. Investors are particularly drawn to:

Low Expense Ratios: Many of Vanguard’s ETFs have some of the lowest fees in the industry, allowing you to keep more of your returns.
Diverse Asset Classes: Whether you are seeking large-cap, small-cap, international, or sector-specific funds, Vanguard offers a wide array of ETFs.
Strong Long-term Performance: Historical performance, particularly over five and ten-year periods, consistently shows Vanguard ETFs outperforming many of their competitors.

Large-Cap Growth: Vanguard Mega Cap Growth ETF (MGK)

For investors focusing on large-cap growth, the Vanguard Mega Cap Growth ETF (MGK) stands out as a top performer. Here’s why:

Expense Ratio: 0.07%
5-Year Return: 11.7%
10-Year Return: 14.8%
Yield: 1.2%

MGK offers exposure to large-cap growth stocks, typically featuring well-established companies with strong growth potential. Over the last five years, MGK has delivered a consistent performance, making it a top choice for investors who want exposure to blue-chip companies with strong earnings growth.

Large-Cap Value: Vanguard Value ETF (VTV)

For those looking at large-cap value investments, the Vanguard Value ETF (VTV) provides a balanced option:

Expense Ratio: 0.04% (One of the lowest in the industry)
5-Year Return: 11.4%
Yield: 2.4%

VTV focuses on large-cap companies that are undervalued by the market, offering long-term investors opportunities for capital appreciation combined with dividend income. With its low expense ratio and solid historical performance, VTV is a great choice for value-focused investors.

Sector-specific ETFs: Vanguard Information Technology ETF (VGT)

In the technology sector, the Vanguard Information Technology ETF (VGT) is hard to beat:

Expense Ratio: 0.10%
5-Year Return: 22.1%
Yield: 0.65%

VGT tracks companies in the technology sector, which has seen explosive growth over the past decade. With companies like Apple and Microsoft in its holdings, VGT has benefited from the robust performance of tech stocks, making it one of the best-performing sector ETFs.

Small-Cap Growth: Vanguard Small-Cap Growth ETF (VBK)

Investors interested in small-cap growth stocks should consider the Vanguard Small-Cap Growth ETF (VBK):

Expense Ratio: 0.07%
5-Year Return: 7.3%
10-Year Return: 8.9%
Yield: 0.7%

While small-cap stocks tend to be more volatile, VBK offers exposure to a diversified group of high-growth small-cap companies. Although the returns are slightly lower than large-cap funds, the growth potential remains significant, particularly over longer periods.

Best for Dividends: Vanguard High Dividend Yield ETF (VYM)

If you’re seeking income through dividends, the Vanguard High Dividend Yield ETF (VYM) is an excellent option:

Expense Ratio: 0.06%
5-Year Return: 10.6%
Yield: 2.9%

VYM targets companies with above-average dividend yields, making it ideal for income-focused investors. In addition to its strong yield, VYM’s performance over the last five years has been solid, offering capital appreciation alongside dividend income.

International Exposure: Vanguard International High Dividend Yield ETF (VYMI)

For those wanting exposure to international markets, Vanguard International High Dividend Yield ETF (VYMI) is a noteworthy contender:

Expense Ratio: 0.22%
5-Year Return: 8.1%
Yield: 4.5%

While international markets can present more risk, VYMI has managed to balance risk with reward, delivering a high dividend yield alongside moderate returns over the last five years. This ETF is best suited for investors seeking diversified income streams outside the U.S.

Bond Market: Vanguard Total Bond Market ETF (BND)

Fixed-income investors might want to look at the Vanguard Total Bond Market ETF (BND) for stable returns:

Expense Ratio: 0.03%
Yield: 3.37%
5-Year Return: 0.2%
10-Year Return: 1.6%

BND offers exposure to the entire U.S. bond market, including government, corporate, and mortgage-backed securities. While bond ETFs generally have lower returns compared to equity ETFs, they provide stability and are an essential part of a diversified portfolio.

Other Noteworthy Vanguard ETFs

Vanguard Real Estate ETF (VNQ): Offers exposure to the U.S. real estate market.
- Expense Ratio: 0.12%
- 5-Year Return: 4.2%
- Yield: 3.94%
Vanguard Energy ETF (VDE): A top performer in the energy sector.
- Expense Ratio: 0.10%
- 5-Year Return: 14.0%
- Yield: 2.93%
Vanguard Short-Term Inflation-Protected Securities ETF (VTIP): Ideal for inflation protection.
- Expense Ratio: 0.04%
- 5-Year Return: 3.3%
- Yield: 3.0%

The Role of Expense Ratios in Long-Term Returns

Expense ratios may seem minor, but they play a crucial role in determining long-term returns. For example, if you invest in a fund with a 0.04% expense ratio, like VTV or VBR, versus one with a 0.22% ratio, such as VYMI, the difference in fees adds up over time. This is especially true in a low-return environment, where even small differences in costs can significantly impact overall performance.

Conclusion: Choosing the Right Vanguard ETF for You

Selecting the best Vanguard ETF depends on your financial goals, risk tolerance, and investment time horizon. Whether you’re seeking growth, value, income, or diversification, Vanguard has a wide variety of ETFs tailored to meet different needs.

When deciding, always consider factors such as:

Expense Ratios: Lower fees mean more of your money stays invested.
Historical Performance: While past performance isn’t always indicative of future results, it’s a good benchmark.
Risk Level: Assess your risk tolerance before choosing an ETF.

By incorporating these factors into your decision-making process, you can find the right Vanguard ETF to match your financial objectives, whether you are looking to build wealth, generate income, or hedge against inflation.

With their low costs, strong performance, and wide range of offerings, Vanguard ETFs are a cornerstone of many investment portfolios and should be considered by anyone looking to optimize their investment strategy.

You can download the Vanguard ETF Cheatsheet below. I have included: