In this article, we discuss 11 best Vanguard ETFs. If you want to skip our discussion on the ETF landscape, head over to 5 Best Vanguard ETFs For 2024.
Since the launch of SPDR S&P 500 ETF Trust (NYSE:SPY), ETFs have gained significant prominence in the index investing landscape and beyond. In the US market, ETF assets have surged to $6.5 trillion in assets under management (AUM), growing at an annualized rate of 23.8% since 2000. The number of ETF offerings has also increased to 2,988 funds. According to State Street Global Advisors, nearly three-quarters of surveyed ETF investors believe that ETFs have enhanced the overall performance of their portfolios, and more than two-thirds think ETFs have improved their investing skills. ETF trading volumes illustrate their role as a primary liquidity vehicle in the secondary market, representing 32% of trading volume on US exchanges in 2022—a figure that has steadily increased over the past four years.
As per PwC’s latest Global ETF report, global ETF assets under management (AUM) are expected to reach at least $19.2 trillion by June 2028, growing from $11.5 trillion at the end of 2023, representing a compound annual growth rate (CAGR) of 13.5% over the five-year period. The US dominates the ETF market, accounting for over 70% of global ETF AUM in 2023. 64% of US respondents anticipate US ETF AUM to reach at least $13 trillion by June 2028, reflecting a 12.5% CAGR. Europe, the second-largest region for ETFs, is expected to reach $3 trillion or more by June 2028, according to 60% of European survey respondents, representing a minimum CAGR of 14.3% over five years.
In the Asia Pacific region, 77% of survey respondents believe that ETF AUM will reach at least $2.5 trillion by June 2028, with a CAGR of 17.8%. Canadian survey respondents forecast Canadian ETF AUM to reach at least $700 billion by 2028, indicating a 19.6% CAGR. The survey underscores the increasing role of retail investors in future growth, with 57% of European respondents and 82% of US participants expecting significant demand from retail investors in the next few years. PwC suggests that over $68 trillion could be transferred from baby boomers to millennials by 2030, with millennials showing a strong preference for ETFs.
In 2023, active ETFs experienced substantial growth, particularly in the United States, where they attracted significant inflows despite having relatively smaller assets under management. The interest in active ETFs is evident through new launches and mutual fund-to-ETF conversions in the past year. According to a recent survey by PwC involving ETF leaders, the industry anticipates a notable surge in demand for active ETFs in the coming years. Specifically, 76% of respondents expect “significant” demand for active ETFs within the next two to three years.
In this article, we discuss some of the best Vanguard ETFs for 2024, including Vanguard Information Technology Index Fund ETF Shares (NYSE:VGT), Vanguard S&P 500 Growth Index Fund ETF Shares (NYSE:VOOG), and Vanguard S&P 500 ETF (NYSE:VOO).
Our Methodology
We curated our list of the best Vanguard ETFs by choosing consensus picks from multiple credible websites. We have mentioned the 5-year share price performance of each ETF as of March 11, 2024, ranking the list in ascending order of the share price. We have also discussed the top holdings of the ETFs to offer better insight to potential investors.
A close-up of a stock market ticker displaying the company’s stocks.
Best Vanguard ETFs For 2024
11. Vanguard Total International Stock Index Fund ETF Shares (NASDAQ:VXUS)
5-year Share Price Performance as of March 11: 14.40%
Vanguard Total International Stock Index Fund ETF Shares (NASDAQ:VXUS) aims to replicate the FTSE Global All Cap ex US Index, tracking the performance of stocks issued by non-US companies. It provides diverse exposure to developed and emerging markets outside the United States through a passively managed approach. As of February 27, 2024, the ETF’s expense ratio is 0.08%. It holds a portfolio of 8577 stocks, with total net assets reaching $398.2 billion as of January 31, 2024.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the largest holding of Vanguard Total International Stock Index Fund ETF Shares (NASDAQ:VXUS). On March 6, J.P. Morgan increased its price target for Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) shares from NT$770 to NT$850, citing expectations of increased revenue from artificial intelligence.
According to Insider Monkey’s fourth quarter database, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was part of 105 hedge fund portfolios, compared to 107 in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 31 million shares worth $3.2 billion.
Like Vanguard Information Technology Index Fund ETF Shares (NYSE:VGT), Vanguard S&P 500 Growth Index Fund ETF Shares (NYSE:VOOG), and Vanguard S&P 500 ETF (NYSE:VOO), Vanguard Total International Stock Index Fund ETF Shares (NASDAQ:VXUS) is one of the best Vanguard ETFs.
Baron Emerging Markets Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its fourth quarter 2023 investor letter:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) contributed in the fourth quarter due to investor expectations for a cyclical recovery in semiconductors heading into 2024 and significant incremental demand for artificial intelligence (AI) chips. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, 5G, and IoT, will allow the company to sustain strong double-digit earnings growth over the next several years.”
10. Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE:VEA)
5-year Share Price Performance as of March 11: 20.30%
Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE:VEA) aims to replicate the FTSE Developed All Cap ex US Index, providing a convenient means to mirror the investment performance of a diverse range of large-, mid-, and small-cap stocks in Canada, Europe, and the Pacific region. Employing a passively managed full-replication approach, Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE:VEA) offers an expense ratio of 0.05% as of February 28, 2024. The fund’s portfolio comprises 4034 stocks, with net assets totaling $178.3 billion as of January 31, 2024. Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE:VEA) is one of the best Vanguard ETFs to buy.
Novo Nordisk A/S (NYSE:NVO) is the top holding of Vanguard FTSE Developed Markets Index Fund ETF Shares (NYSE:VEA). The company is involved in the research, development, manufacture, and distribution of pharmaceutical products globally. On January 31, Novo Nordisk A/S (NYSE:NVO) reported a Q4 GAAP EPS of DKK 4.91 and a revenue of DKK 65.86 billion, up 37% on a year-over-year basis.
According to Insider Monkey’s fourth quarter database, 58 hedge funds were bullish on Novo Nordisk A/S (NYSE:NVO), compared to 51 funds in the prior quarter.
Polen Global Growth Strategy stated the following regarding Novo Nordisk A/S (NYSE:NVO) in its fourth quarter 2023 investor letter:
“As we discussed in last quarter’s commentary, Novo Nordisk A/S (NYSE:NVO) is a newer addition to the strategy. Over the fourth quarter, we continued to build the position to an average weight. As a reminder, Novo Nordisk is a global pharmaceutical company based in Denmark and has long been the leader in developing insulin for diabetes patients. In recent years, the company’s innovation into GLP-1 drugs has been shown not only to help diabetics control blood sugar levels but also to have significant efficacy in weight loss. Obesity has become a global epidemic, creating materially negative knock-on effects for humans that range from an increase in cardiovascular events and, thus, higher mortality to a lower general quality of life. We believe that, over time, payors will recognize the value of these obesity treatments to both patients and the overall healthcare system.”
9. Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:VYM)
5-year Share Price Performance as of March 11: 36.10%
Next on our list of the best Vanguard ETFs is Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:VYM). Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:VYM) aims to replicate the performance of the FTSE High Dividend Yield Index, which focuses on common stocks of companies known for high dividend yields. This ETF offers a convenient way to invest in stocks projected to have above-average dividend yields, utilizing a passively managed, full-replication approach. As of February 27, 2024, Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:VYM) has an expense ratio of 0.06%. Its portfolio comprises 450 stocks, and net assets totaling $63.3 billion as of January 31, 2024.
Vanguard High Dividend Yield Index Fund ETF Shares (NYSE:VYM)’s top holding is Broadcom Inc. (NASDAQ:AVGO). On March 8, Broadcom Inc. (NASDAQ:AVGO) declared a $5.25 per share quarterly dividend, in line with previous. The dividend is payable on March 29, to shareholders on record as of March 21.
According to Insider Monkey’s fourth quarter database, 91 hedge funds were bullish on Broadcom Inc. (NASDAQ:AVGO), compared to 87 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the biggest position holder in the company, with a $2.3 billion stake.
Carillon Eagle Growth & Income Fund stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its fourth quarter 2023 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) traded higher after closing on its acquisition of VMware. The company also announced earnings that were relatively in line with estimates with some benefit of better operating expenses. The stock appears to be one of the first real beneficiaries of generative artificial intelligence (AI) with meaningful revenue expected to show up in 2024.”
8. Vanguard Value Index Fund ETF Shares (NYSE:VTV)
5-year Share Price Performance as of March 11: 45.76%
Vanguard Value Index Fund ETF Shares (NYSE:VTV) aims to replicate the CRSP US Large Cap Value Index, tracking the investment return of large-capitalization value stocks. This ETF mirrors the performance of numerous prominent value stocks in the United States. Employing a passively managed, full-replication approach, Vanguard Value Index Fund ETF Shares (NYSE:VTV) has a net expense ratio of 0.04% as of February 28, 2024. With a portfolio comprising 350 stocks, the fund’s net assets amount to $157.0 billion as of January 31, 2024. Vanguard Value Index Fund ETF Shares (NYSE:VTV) is one of the best Vanguard ETFs to invest in.
Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-B) is the largest holding of Vanguard Value Index Fund ETF Shares (NYSE:VTV). In Q4 2023, Berkshire Hathaway Inc. (NYSE:BRK-B) reported strong financial results with a nearly 21% increase in operating revenue, excluding investment and derivative gains/losses. The growth was driven by the insurance and reinsurance operations, along with investment income, benefiting from improved cash flow trends due to lower catastrophes and higher short-term interest rates. Analyst Cathy Seifert from CFRA, who assigned the stock a Buy rating on February 26, considers this growth significant for Berkshire Hathaway Inc. (NYSE:BRK-B)’s size.
According to Insider Monkey’s fourth quarter database, 117 hedge funds were long Berkshire Hathaway Inc. (NYSE:BRK-B), compared to 116 funds in the last quarter.
Here is what Black Bear Value Fund has to say about Berkshire Hathaway Inc. (NYSE:BRK-B) in its Q3 2022 investor letter:
“Going forward I expect Berkshire to compound at above average returns from this price. BRK is a collection of high-quality businesses, excellent management, and a good amount of optionality in their cash position. If the cash were to be deployed accretively, the true value would be greater than an 8% premium (as mentioned above). The combination of a pie that is growing, an increasing share of said pie due to stock buybacks, upside optionality from cash and a tight range of likely business outcomes that span a variety of economic futures gives me comfort in continuing to own Berkshire.”
7. Vanguard Health Care Index Fund ETF Shares (NYSE:VHT)
5-year Share Price Performance as of March 11: 53.46%
Vanguard Health Care Index Fund ETF Shares (NYSE:VHT) aims to replicate the performance of Spliced U.S. Investable Market Health Care 25/50 Index1, which is a benchmark index measuring the investment return of healthcare stocks. The ETF includes stocks of companies engaged in medical or health care products, services, technology, or equipment. Vanguard Health Care Index Fund ETF Shares (NYSE:VHT) employs passive management, utilizing a full-replication strategy when feasible and a sampling strategy if regulatory constraints require. As of December 22, 2023, the fund has an expense ratio of 0.10%. Vanguard Health Care Index Fund ETF Shares (NYSE:VHT)’s portfolio consists of 419 stocks, with net assets totaling $20.0 billion as of January 31, 2024. Vanguard Health Care Index Fund ETF Shares (NYSE:VHT) is one of the best Vanguard ETFs to buy.
Eli Lilly and Company (NYSE:LLY) is the largest holding of Vanguard Health Care Index Fund ETF Shares (NYSE:VHT). Eli Lilly and Company (NYSE:LLY) provided its 2024 guidance, anticipating revenue between $40.4 billion and $41.6 billion, surpassing the consensus estimate of $39.14 billion. The estimated EPS range is $11.80 to $12.30, with non-GAAP EPS expected to fall between $12.20 and $12.70, while the consensus estimate is $12.38.
According to Insider Monkey’s fourth quarter database, 102 hedge funds were bullish on Eli Lilly and Company (NYSE:LLY), same as the third quarter.
Aristotle Atlantic Core Equity Strategy stated the following regarding Eli Lilly and Company (NYSE:LLY) in its fourth quarter 2023 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a leading pharmaceutical company that develops diabetes, oncology, immunology and neuroscience medicines. The company generates over half of its revenue in the U.S. from its top-selling drugs Trulicity, Verzenio and Taltz. The company operates in a single business segment, Human pharmaceutical products.
Eli Lilly has a deep pipeline in treatment areas focused on metabolic disorders, oncology, immunology and central nervous system disorders. Currently, there are two phase three assets, Orforglipron, an oral GLP-1 and retatrutide, a triple incretin agonist, which have the potential to expand upon the potential success of Mounjaro. We believe that Mounjaro has the potential to commercialize beyond type 2 diabetes and obesity, potentially in the areas mentioned above of heart disease, sleep apnea, fatty liver disease and chronic kidney disease. We believe the premium valuation is supported by this outsized growth profile.”
6. Vanguard Mid-Cap Growth Index Fund ETF Shares (NYSE:VOT)
5-year Share Price Performance as of March 11: 64.50%
Vanguard Mid-Cap Growth Index Fund ETF Shares (NYSE:VOT) ranks 6th on our list of the best Vanguard ETFs to buy. Vanguard Mid-Cap Growth Index Fund ETF Shares (NYSE:VOT) aims to replicate the CRSP US Mid Cap Growth Index, tracking the investment return of mid-capitalization growth stocks. This ETF offers a convenient means to mirror the performance of a diversified group of midsize growth companies. Employing a passively managed, full-replication approach, the fund has an expense ratio of 0.07% as of February 28, 2024. The portfolio comprises 150 stocks, and the net assets as of January 31, 2024 amount to $22.7 billion.
Arista Networks, Inc. (NYSE:ANET) is the largest holding of Vanguard Mid-Cap Growth Index Fund ETF Shares (NYSE:VOT). Arista Networks, Inc. (NYSE:ANET) focuses on developing, marketing, and selling data-driven networking solutions for data center, campus, and routing environments globally. On February 12, the company reported a Q4 non-GAAP EPS of $2.08, beating market estimates by $0.37. The revenue increased 20.3% year-over-year to $1.54 billion, in line with analysts’ expectations.
According to Insider Monkey’s fourth quarter database, 64 hedge funds were long Arista Networks, Inc. (NYSE:ANET), compared to 59 funds in the prior quarter. Steve Cohen’s Point72 Asset Management is the largest stakeholder of the company, with 833,408 shares worth $196.2 million.
In addition to Vanguard Information Technology Index Fund ETF Shares (NYSE:VGT), Vanguard S&P 500 Growth Index Fund ETF Shares (NYSE:VOOG), and Vanguard S&P 500 ETF (NYSE:VOO), Vanguard Mid-Cap Growth Index Fund ETF Shares (NYSE:VOT) is one of the best Vanguard ETFs to invest in.
Giverny Capital Asset Management stated the following regarding Arista Networks, Inc. (NYSE:ANET) in its fourth quarter 2023 investor letter:
“We did a bit of portfolio sculpting during the year, with mixed results. We trimmed Arista Networks, Inc. (NYSE:ANET) several times during the year as it soared. Those trims, a very small one in March at roughly $163 and a larger one in August at $183, don’t look smart with Arista finishing the year at $235 (and up more in January). Arista rose 94% this year. The good news is, Arista finished the year as our second largest holding, at 7.9% of the portfolio.
If you are wondering how I could sell some Arista at $163 but then hold most of it at $235, the answer is that Arista’s outstanding competitive position in Artificial Intelligence became clearer to me as the year progressed. I felt in March that Arista would earn $8 per share in a few years. I see today that it might earn $8 in 2025.
It’s possible there is AI-related froth in the Arista stock price, but also probable that Arista will continue to grow rapidly as the computing centers that process AI queries require enormous amounts of data bandwidth. I believe Arista’s routers and switches are the best tools for routing so-called hyperscale traffic. Also, its operating software allows computer giants to manage the kudzu-like growth of their data centers, lowering their total cost of operation.
The sales of both Arista and Heico reflected my desire to manage PE multiple risk. I keep learning the hard way, however, that trimming your winners generally doesn’t add value. If the valuation is beyond justification, sell the position. If the valuation is high but the business continues to dominate its niche, grow steadily and add value for customers, maybe just take a walk around the block until the urge to sell goes away.”
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Disclosure: None. 11 Best Vanguard ETFs For 2024 is originally published on Insider Monkey.