10 Best Vanguard Funds To Hold for Long-Term Investing

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The Balance / Jaime Knoth 

Vanguard funds may be good investments for your portfolio if you're looking to invest for your future. You can choose from a great selection of high-quality, low-cost mutual funds and exchange-traded funds (ETFs) and buy and hold them for the long term. These features make Vanguard funds ideal choices for a wide variety of investors.

Vanguard offers more than 200 U.S. funds (including variable annuity portfolios) and more than 220 additional funds and ETFs in markets outside the U.S.

Key Takeaways

  • Vanguard is a well-known investment firm with a wide variety of funds for investors to buy and hold.
  • The best Vanguard funds have low expenses which allow you to keep more of your returns.
  • From mutual funds to ETFs to target retirement funds, Vanguard is just one place where you can invest your money for the long term.
  • Returns are never guaranteed, so learn the pros and cons of investing with Vanguard, plus how to choose the best funds for your investment goals before getting started.

10 Best Vanguard Funds

These are some of the best Vanguard funds to buy and hold, in no particular order. After reviewing the funds, learn more about the pros and cons, long-term investing, and choosing the right funds for your needs.

Fund  Expense Ratio  Minimum Investment 
VTSAX  0.04%  $3,000 
VWINX 0.23%  $3,000 
VFIAX  0.04%  $3,000 
VBTLX  0.05%  $3,000 
VGSTX  0.31%  $1,000 
VTIAX  0.11%  $3,000 
VIGAX  0.05%  $3,000 
VBIAX  0.07%  $3,000 
VIMAX  0.05%  $3,000 
Target Retirement Funds  Varies  Varies 

Vanguard Total Stock Market Index (VTSAX)

Vanguard's VTSAX is a diversified stock index mutual fund. The fund provides exposure to the entire U.S. stock market, including small-, mid-, and large-cap stocks. This mix includes over 4,000 stocks. The expense ratio is 0.04%, or $4 for every $10,000 invested. The minimum initial investment is $3,000 for Admiral Shares.


Vanguard's VTSAX is also available as an ETF (VTI). The expense ratio for the ETF is 0.03% and the minimum investment is the price of one share.

Vanguard Wellesley Income (VWINX)

VWINX is a balanced fund from Vanguard. It holds a conservative (low-risk) allocation of about 40% stocks and 60% bonds. VWINX may be the right choice for long-term investors with a somewhat low tolerance for risk or retired investors looking for both income and growth. The expense ratio for VWINX is 0.23%. The minimum initial investment is $3,000.

Vanguard 500 Index (VFIAX)

This index fund tracks the S&P 500, so it holds about 500 of the largest U.S. stocks. VFIAX shareholders get exposure to stocks like Apple (AAPL), Meta (META), Amazon (AMZN), and Alphabet (GOOG, GOOGL), the parent company of Google.

VFIAX is a smart choice for building a portfolio that includes other stock funds, such as small- and mid-cap funds. The expense ratio for VFIAX is 0.04%. The minimum initial investment is $3,000.


VFIAX is also available as an ETF (VOO). The expense ratio is 0.03% and the minimum investment is equal to the price of one share.

Vanguard Total Bond Market Index (VBTLX)

Long-term investing is often associated with stocks, but most investors will need to have a portion of their portfolios invested in bonds.

VBTLX is a smart choice for the same reason as most other index funds. They're well-diversified, and they're low-cost. The VBTLX portfolio consists of more than 10,000 U.S. government and corporate bonds. The expense ratio for VBTLX is 0.05%. The minimum initial investment is $3,000.


VBTLX is also available as an ETF. The Vanguard Total Bond Market ETF (BND) has an expense ratio of 0.03%. The minimum investment is equal to the price of one share.

Vanguard STAR Fund (VGSTX)

You may have noticed that you'll need $3,000 to start investing in most Vanguard funds, but VGSTX has a lower minimum of just $1,000. It's also known as a "fund of funds," which means that it invests in other mutual funds, all in one fund option.

The STAR fund invests in a diversified mix of 10 Vanguard funds, making it a solid option for beginning investors or those who want a single-fund solution. The expense ratio is 0.31%, but Vanguard claims that funds with similar holdings have an average expense ratio of 0.84%, making its fund cheaper.

Vanguard Total International Stock Market Index (VTIAX)

Most investors will include international stock funds to build a complete long-term portfolio. VTIAX is one of the best Vanguard funds for this purpose.

VTIAX tracks an index that includes almost 8,000 non-U.S. stocks. It includes both developed and emerging markets. Shareholders can gain exposure to the entire stock market outside the U.S. for an expense ratio of 0.11%. The minimum initial investment is $3,000.


Investors can also pick up the index at one-share costs, like Vanguard Total International Stock ETF (VXUS), with a lower expense ratio of 0.07%.

Vanguard Growth Index (VIGAX)

Investors who are willing to take more risk in exchange for higher returns than the broad market indexes can take a look at VIGAX. This index fund holds large-cap growth stocks that have historically outperformed the S&P 500, especially for periods of 10 years or more. Expenses for VIGAX are 0.05%. The minimum initial investment is $3,000.


VIGAX is also available as Vanguard Growth ETF (VUG) with a 0.04% expense ratio and a minimum investment equal to the price of one share.

Vanguard Balanced Index (VBIAX)

Vanguard has a small but very nice selection of balanced funds—mutual funds or ETFs that invest in stocks and bonds. VBINX has a moderate (medium risk) allocation of about 60% stocks and 40% bonds. The stock portion invests in a total stock index. The bond portion invests in a total bond index. The expenses are 0.07%. The minimum initial investment is $3,000.

Vanguard Mid-Cap Index (VIMAX)

Historically, small- and mid-cap stocks have performed better than large-cap stocks in the long run, but mid-cap stocks can be the wisest choice of the three. Although mid-cap stocks generally have a higher market risk, they typically have a lower risk than small caps.

Investors often consider mid-caps to be the sweet spot of investing, because of their returns in relation to risk. VIMAX has a low expense ratio of 0.05%. The minimum initial investment is $3,000.


The same blend is also available as Vanguard Mid-Cap ETF (VO), with a 0.04% expense ratio and a minimum investment equal to the price of one share.

Vanguard Target Retirement Funds

There are several Vanguard Target Retirement Funds to choose from. Some investors are wise to consider this unique investment type. As the name suggests, the strategy of these funds is geared toward the target retirement year that is specific to the fund.

For example, Vanguard Target Retirement 2040 (VFORX) has an asset allocation of about 80% stocks and 20% bonds across four Vanguard funds, which is about right for an investor who will be retiring near the year 2040. It has an expense ratio of 0.08% and a minimum investment of $1,000. If you're not retiring until close to 2065, the Vanguard Target Retirement 2065 (VLXVX) may be a better fit. It is made up of four other Vanguard funds, with an expense ratio of 0.08% and a minimum investment of $1,000.


Vanguard's Target Retirement Funds are good choices for investors who want to buy and hold one mutual fund until retirement. Some planners call these "set-it-and-forget-it" funds because you don't need to build a portfolio of funds or manage a portfolio.

Pros and Cons of Vanguard Funds

There are some pros and cons when it comes to investing in mutual funds from Vanguard, but this is the case with any mutual fund company.

  • Low-cost funds with the ability to replicate the performance of a particular market index

  • Bond funds and international stock funds can provide good diversification

  • Many mutual funds are also available as an ETF with a lower minimum investment required

  • Long-term investment funds mean leaving your money in the account for years

  • Large number of funds means you'll have to do more research

  • Many funds require a minimum investment of $3,000

Are You a Long-Term Investor?

Decide whether you're a long-term investor before buying Vanguard funds.

You could hear 10 different explanations about what "long-term" means if you talk with 10 different financial planners. You'd be long-term if you have at least 10 years before you'd need to begin withdrawing from your accounts. This also holds true for long-term bonds and long-term bond funds. 


If you're looking to save for a future purchase like a car or house, investing in long-term funds may not be the right strategy. Consider other short-term investments and savings products like certificates of deposit (CDs).

Retired investors may make the common mistake of thinking of themselves as "short-term" investors. They might be making withdrawals to bolster their retirement income, but they may easily have a life expectancy of at least 10 more years. The average life expectancy in the U.S. is 77 years.

You'd still have 12 years to invest if you were to retire at age 65 and live until you were 77. Depending on your sources of income and your overall financial picture, you'll need to invest at least a portion of your retirement assets in long-term investments, which can include stock mutual funds.

Choosing the Right Funds for Your Needs

The best long-term investments generally consist of stock mutual funds, especially index funds.


Stock mutual funds may be a good choice if you have at least three years before starting withdrawals.

Index funds also make smart choices for long-term investing. Vanguard's index funds are among the top choices for long-term investors. They've attracted such a large amount of assets that Vanguard has become the largest mutual fund company in the world.

Vanguard index funds make smart choices for long-term investing because index funds are passively managed. They have lower expense ratios than actively managed funds. They also offer a long-term edge for performance, because their expense ratios are so low. This happens because most active fund managers don't beat the major market indexes for periods longer than 10 years.

You might as well invest in funds that match the market at a lower cost rather than try to beat the market. Beating the market is very hard to do consistently over the long run.

Frequently Asked Questions (FAQs)

What are the best Vanguard funds for retirees?

The best Vanguard funds for retirees will depend on age and tolerance for risk. That means the best fund could be a balanced or income fund if you're younger, or a bond or target-date mutual fund if you're older.

Which Vanguard mutual fund will have the best capital gains?

In general, the higher the risk, the higher the potential for capital gains. If you're comparing two stock funds, then you may have a higher probability of capital gains with growth or small-cap funds than with dividend or blue-chip funds. Keep in mind that the opportunity for capital gains also exposes you to the potential for capital losses.

The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal.

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  2. Vanguard. "Vanguard Total Stock Market Index Fund Admiral Shares."

  3. Vanguard. "Vanguard Total Stock Market ETF (VTI)."

  4. Vanguard. "Vanguard Wellesley Income Fund Investor Shares (VWINX)."

  5. Vanguard. "Vanguard 500 Index Fund Admiral Shares (VFIAX)."

  6. Vanguard. "Vanguard S&P 500 ETF (VOO)."

  7. Vanguard. "Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)"

  8. Vanguard. "Vanguard Total Bond Market ETF (BND)."

  9. Vanguard. "Vanguard STAR Fund (VGSTX)."

  10. Vanguard. "Vanguard Total International Stock Market Index (VTIAX)."

  11. Vanguard. "Vanguard Total International Stock ETF (VXUS)."

  12. Vanguard. "Vanguard Growth Index Fund Admiral Shares (VIGAX)."

  13. Vanguard. "Vanguard Growth ETF (VUG)."

  14. Vanguard. "Vanguard Balanced Index Fund Admiral Shares (VBIAX)."

  15. Vanguard. "Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX)."

  16. Vanguard. "Vanguard Mid-Cap ETF (VO)."

  17. Vanguard. "Vanguard Target Retirement 2040 Fund (VFORX)."

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