10 Best Vanguard ETFs for 2022

We have identified and analyzed the 10 best Vanguard ETFs that you can buy today. 

Best Vanguard ETFs: Overview

A Vanguard exchange-traded fund (ETF) is a collection of tens, hundreds, or even thousands of stocks or bonds in a single fund.

These funds are designed to passively match or track a given index intraday, such as the S&P 500 Index or Russell 2000 Index.

ETFs require less work than individual stock selection while providing more diversification. Additionally, they’re more liquid, tax advantageous, and cheaper than mutual funds.

Vanguard has approximately 80 ETFs, but here is the ten that you need to know.

Best Vanguard ETFs

#1. Vanguard S&P 500 ETF (VOO)

• Performance over 1-Year: -6.00%
• Expense Ratio: 0.03%
• Assets Under Management: $257 billion
• Risk Potential: 4 out of 5

The Vanguard S&P 500 ETF (VOO) invests in stocks in the S&P 500 Index, which is a market-cap weighted index of the 500 largest U.S. publicly traded companies.

Most investors turn to this index to see “how the market is doing.” Other popular indices are the Nasdaq-100 Index and the Dow Jones Industrial Average.

“Beating the market” means earning investment returns that outperform the S&P 500 Index — a feat that few active managers can accomplish over a long period of time.

Each year, the S&P Dow Jones Indices does a study comparing active investing versus passive investing.

In 2020, the study revealed that after 10 years, 85% of large-cap funds underperformed the S&P 500 after 15 years, almost 92% were trailing the index.

If you’re smarter than 85% of active managers, who have millions of dollars at their disposal for research, algorithms, and idea dinners, then play the field and pick your stocks.

If not, consider buying VOO, and you’ll outperform the majority of active managers on the street, at least over a long period of time.

VOO Top Holdings:

• Apple (AAPL) 6.55%
• Microsoft (MSFT) 5.99%
• Alphabet (GOOG, GOOGL) 3.92%
• Amazon.com (AMZN) 2.90%
• Tesla (TSLA) 1.76%
• Berkshire Hathaway (BRK.B) 1.54%
• UnitedHealth Group (UNH) 1.50%
• Johnson & Johnson (JNJ) 1.46%
• NVIDIA (NVDA) 1.18%

#2. Vanguard Total Stock Market ETF (VTI)

• Performance over 1-Year: -9.00%
• Expense Ratio: 0.03%
• Assets Under Management: $255 billion
• Vanguard Potential: 4 out of 5

The Vanguard Total Stock Market ETF (VTI) seeks to track the performance of a benchmark index that measures the investment return of the overall stock market, which includes a blend of large-, mid-, and small-cap equity diversified across growth and value styles.

While VOO exclusively invests in large-cap equities, VTI does not discriminate by size.

VTI’s top holdings are identical to VOO, but they differ in weights – and they should. There are +4,000 holdings in VTI compared to 500 in VOO. 

However, the top holdings don’t differ that much. The top 10 holdings in VTI make up 22% of the fund versus 27% in VOO.

So, VTI feels FAAMG returns and maintains exposure to the small percentage of small-caps that pop.

VTI Top Holdings:

• Apple (AAPL) 5.56%
• Microsoft (MSFT) 5.08%
• Alphabet (GOOG, GOOGL) 3.27%
• Amazon.com (AMZN) 2.43%
• Tesla (TSLA) 1.57%
• UnitedHealth Group (UNH) 1.27%
• Johnson & Johnson (JNJ) 1.24%
• Berkshire Hathaway (BRK.B) 1.21%
• Meta Platforms (META) 0.98%
• NVIDIA (NVDA) 0.95%

#3. Vanguard Information Technology ETF (VGT)

• Performance over 1-Year: -11.0%
• Expense Ratio: 0.10%
• Assets Under Management: $43 billion
• Risk Potential: 5 out of 5

The Vanguard Information Technology ETF (VGT) tracks an index of stocks in the information technology sector, specifically those in the electronics and computers industries.

VGT is Vanguard’s flagship tech offering, with concentrated exposure to the two largest U.S. companies Apple and Microsoft. These giants make up 35% of the fund themselves.

You’ll also gain access to the financial technology sector with this ETF, better known as ‘fintech.’ The likes of Visa, Mastercard, and PayPal command a significant portion of the fund.

VGT often draws comparisons to the Invesco QQQ Trust ETF (QQQ), which tracks the tech-heavy Nasdaq-100 Index. However, there are staunch differences.

QQQ’s expense ratio is double that of VGT but includes companies that you might not associate with “tech”, such as Kraft Heinz, Keurig Dr Pepper, and Moderna.

VGT Top Holdings:

• Apple (AAPL) 22.94%
• Microsoft (MSFT) 18.80%%
• NVIDIA (NVDA) 3.90%
• Visa (V) 3.14%
• Mastercard (MA) 2.83%
• Broadcom (AVGO) 2.04%
• Cisco Systems (CSCO) 1.82%
• Accenture (ACN) 1.80%
• Adobe (ADBE) 1.77%

#4. Vanguard Total Bond Market ETF (BND)

• Performance over 1-Year: -9.00%
• Expense Ratio: 0.05%
• Assets Under Management: $82 billion
• Risk Potential: 2 out of 5

The Vanguard Total Bond Market ETF (BND) tracks the performance of a broad, market-weighted bond index that consists of the taxable investment-grade U.S. dollar-denominated bond market.

BND aims to offer a relatively high potential for investment income. Bonds make up 100% of this ETF, and they’re traditionally less volatile than stocks.

Given the lower risk profile and volatility, BND can serve as a safe haven during periods of economic uncertainty.

Historically, earning just 1-2% on fixed income bonds will keep up with inflation, but this is no longer the case with inflation at record-highs. 

We recommend steering clear of BND if you have decades left in the market – consider bonds when you’re closer to pulling your money out.

BND Top Holdings – Distribution by Credit Quality:

• U.S. Government 67.20%
• AAA 3.80%
• AA 3.00%
• A 11.70%
• BBB 14.20%
• Less than BBB 0.10%

#5. Vanguard Real Estate ETF (VNQ)

• Performance over 1-Year: -4.00%
• Expense Ratio: 0.12%
• Assets Under Management: $39 billion
• Risk Potential: 4 out of 5

The Vanguard Real Estate ETF (VNQ) invests in stocks issued by real estate investment trusts (REITs), companies that purchase office buildings, hotels, and other real property.

Investors use REITs to diversify their portfolios and reduce risk, given their comparatively low correlation with other investable assets, like stocks.

Commercial real estate makes up 14% of the U.S. investment market, coming in third place behind bonds and equities at 43% and 38%, respectively.

Also, in addition to the potential for capital appreciation, REITs typically pay out high dividends compared to the average stock.

Some exchanges allow you to buy fractional shares of VNQ. You can invest as little as $1; there is no down payment or mortgage necessary.

VNQ Top Holdings:

• Vanguard Real Estate II Index Fund Institutional Plus Shares (VRTPX) 11.61%
• American Tower Corp (AMT) 7.53%
• Prologis (PLD) 5.63%
• Crown Castle International (CCI) 4.70%
• Equinix (EQIX) 3.85%
• Public Storage (PSA) 3.19%
• Realty Income Corp (O) 2.61%
• Welltower (WELL) 2.29%
• Digital Realty Trust (DLR) 2.27%

#6. Vanguard Value ETF (VTV)

• Performance over 1-Year: +2.00%
• Expense Ratio: 0.04%
• Assets Under Management: $97 billion
• Risk Potential: 4 out of 5

The Vanguard Value ETF (VTV) seeks to track the investment returns of large-cap value stocks.

VTV has a weighted average price-to-earnings ratio far less than the S&P 500 ETFs, and about half that of QQQ. 

PE ratios are used as valuation metrics to determine if a given stock is over or undervalued relative to other stocks in its industry.

Context can dramatically change the interpretation of a PE ratio, but a lower ratio suggests a company might be undervalued by market participants.

The PE ratios are smaller because their denominators (earnings) are massive. 

Unlike a significant portion of growth stocks, value stocks tend to actually turn a profit.

Financials, Health Care, Industries, and Consumer Staples make up nearly two-thirds of the Vanguard Value ETF.

These industries trade less on growth narratives and more on fundamentals.

Warren Buffett, famous value inverter and longtime CEO of Berkshire Hathaway, once said, “Price is what you pay. Value is what you get.”

VTV Top Holdings:

• UnitedHealth Group (UNH) 2.99%
• Berkshire Hathaway Class B (BRK.B) 2.93%
• Johnson & Johnson (JNJ) 2.90%
• Exxon Mobil (XOM) 2.24%
• Procter & Gamble (P.G.) 2.14%
• JPMorgan Chase & Co. (JPM) 2.06%
• Pfizer (PFE) 1.83%
• Eli Lilly and Company (LLY) 1.72%
• AbbVie (ABBV) 1.68%
• Chevron Corporation (CVX) 1.59%

#7. Vanguard Health Care ETF (VHT)

• Performance over 1-Year: -3.00%
• Expense Ratio: 0.10%
• Assets Under Management: $16 billion
• Risk Potential: 5 out of 5

The Vanguard Health Care ETF (VHT) tracks the performance of stocks in the health care sector.

Our research identifies VHT as the best healthcare ETF on the market based on its diversification, fees, and performance. 

VHT companies are involved in providing medical or health care products, services, technology, or equipment.

VHT concentrates on legacy big pharma companies and those that make medical equipment, but it also provides exposure to the growing biotech industry.

VHT includes gene-editing companies like CRISPR Therapeutics (CRSP) and Intellia Therapeutics (NTLA) and synthetic DNA companies like Twist Biosciences (TWST).

Under the current subsector breakdown, as defined by Vanguard, ‘biotechnology’ represents just 18% of VHT.

We expect VHT’s holdings to shift as the definitions of ‘health care’ and ‘biotech’ merge in the coming decades.

VHT Top Holdings:

• UnitedHealth Group (UNH) 8.64%
• Johnson & Johnson (JNJ) 8.35%
• Pfizer (PFE) 5.27%
• AbbVie (ABBV) 4.85%
• Eli Lilly and Company (LLY) 4.69%
• Merck & Co. (MRK) 4.12%
• Thermo Fisher Scientific (TMO) 3.80%
• Abbott Laboratories (ABT) 3.43%
• Danaher Corp (DHR) 3.08%
• Bristol-Myers Squibb Company (BMY) 3.00%

#8. Vanguard High Dividend Yield ETF (VYM)

• Performance over 1-Year: +3.00%
• Expense Ratio: 0.06%
• Assets Under Management: $46 billion
• Risk Potential: 4 out of 5

The Vanguard High Dividend Yield ETF (VYM) captures the investment return of common stocks of companies that are characterized by high dividend yields. These companies tend to be of the large-cap value type.

VYM’s holdings and sector breakdown are similar to that of the Vanguard Value ETF (VTV).

Therefore, it might not be optimal to own each of these ETFs, but rather one or the other.

We believe the Value ETF is a better option than the High Dividend Yield ETF, given its cheaper expense ratio and higher allocation to Berkshire Hathaway.

VYM Top Holdings:

• Johnson & Johnson (JNJ) 3.49%
• Exxon Mobil Corporation (XOM) 2.69%
• Procter & Gamble (P.G.) 2.56%
• JPMorgan Chase (JPM) 2.45%
• Pfizer (PFE) 2.21%
• Chevron Corporation (CVX) 2.12%
• Home Depot (H.D.) 2.11%
• Eli Lilly and Company (LLY) 2.04%
• AbbVie (ABBV) 2.02%
• Coca-Cola Company (KO) 1.83%

#9. Vanguard Small-Cap Growth ETF (VBK)

• Performance over 1-Year: -23.00%
• Expense Ratio: 0.07%
• Assets Under Management: $12 billion
• Risk Potential: 5 out of 5

The Vanguard Small-Cap Growth ETF (VBK) provides exposure to small-cap growth stocks. There are +700 stocks in this fund, and the median market cap is $6.5 billion.

A small-cap growth stock is a corporation whose market cap is between $300 million and $2 billion. These stocks are typically more volatile and get less coverage from Wall Street.

A growth stock is any share in a company that is expected to grow faster than the average growth for the market. These stocks trade at higher multiples because investors are excited about their future outlook.

Vanguard combined these definitions to create an ETF and capitalize on the intersection of small-cap and growth, two areas where ‘volatility’ and ‘potential’ are common.

On average, it’s easier for a $2 billion company to become a $4 billion company than a $400 billion corporation to double. On the other hand, it’s more likely that the same $2 billion will fail.

There’s a ton of potential in the intersection of small-cap and growth – and also risk.

VBK Top Holdings:

• US Dollar (N/A) 2.54%
• Bio-Techne Corp (TECH) 0.77%
• Entegris (ENTG) 0.70%
• Liberty Media Corp (FWONK) 0.69%
• Equity LifeStyle Properties (ELS) 0.66%
• PTC Inc. (PTC) 0.63%
• Fair Isaac Corporation (FICO) 0.59%
• Nordson Corporation (NDSN) 0.59%
• Graco Inc (GGG) 0.57%
• American Homes 4 Rent (AMH) 0.55%

#10. Vanguard FTSE Emerging Markets ETF (VWO)

• Performance over 1-Year: -17.00%
• Expense Ratio: 0.12%
• Assets Under Management: $70 billion
• Risk Potential: 5 out of 5

The Vanguard FTSE Emerging Markets ETF (VWO) invests in stocks located in emerging markets worldwide, such as China, Brazil, Taiwan, and South Africa.

There are over 4,278 companies in VWO, and the median market cap is $24.3 billion.

China garners 37% of the fund, followed by Taiwan and India with 18% and 14%, respectively.

VWO’s top holdings have three of the largest eleven companies by market cap in the world.

So, the other 4,275 companies might be ‘emerging,’ but Tencent, Alibaba, and TSMC aren’t sneaking up on anybody.

Tencent is the parent company of TikTok, the popular social platform that has access to the world’s data.

Tencent also owns WeChat, the super app that has over a billion users and combines messaging, fintech, and e-commerce. It’s like combining the best of iMessage, Cash App, and Shopify into one.

VWO’s second-largest holding is Alibaba, China’s version of Amazon, but bigger and more powerful.

It does the nation’s retail, streaming, cloud computing, and much more.

You’ll also get exposure to Taiwan Semiconductor, the company that generated 56% of the global chip revenues in the most recent quarter.

VWO is vulnerable to geopolitical tensions and trade wars between global superpowers.

For example, the Biden Administration is trying to decrease our dependence on international companies.

The latest $1 Trillion Infrastructure Bill plans to allocate $50 billion to boost domestic chip production.

VWO Top Holdings:

• Taiwan Semiconductor Manufacturing Co. (2330:HKG) 4.52%
• Tencent Holdings (700:HKG) 3.91%
• Alibaba Group Holdings (9988:HKG) 3.09%
• US Dollar (N/A) 1.88%
• Reliance Industries Limited (500325:BOM) 1.60%
• Meituan (3690:HKG) 1.47%
• JD.com (JD) 1.10%
• Taiwan Semiconductor Manufacturing Co., Sponsored ADR (TSM) 1.03%
• Infosys Limited (500209:BOM) 1.03%
• China Construction Bank Corp (939:HKG) 0.90%
• Vale S.A. (VALE3:BSP) 0.81%

Alternatives to the Best Vanguard ETFs

If Vanguard has a certain type of ETF, there’s a good chance that BlackRock (via iShares) or State Street (via SPDR) have it too.

For example, the Vanguard S&P 500 ETF (VOO), the iShares Core S&P 500 ETF (IVV), and the SPDR S&P 500 ETF Trust (SPY) all track the same index. This applies in several other situations.

However, you’ll notice that Vanguard probably has the most cost-effective fees amongst these major ETF providers. VOO and IVV each have a 0.03% expense ratio, while SPY comes in at 0.095%.

Best Vanguard ETF: The Risks

Most of the ETFs in this article consist of stocks — a volatile asset class that requires a risk tolerance.

But it’s all relative. So, how do you define risk?

Bonds are less risky than stocks in terms of volatility, but the volatility variable varies depending on the investor.

A long-term investor in their twenties might welcome a stock market correction and see it as a buying opportunity.

For someone about to retire in their sixties, the same correction might erase decades worth of gains and delay retirement another ten years.

Regardless, we believe the biggest risk to long-term investors is not being in investable assets.

Vanguard ETFs address this risk and remain the best option for most investors.

Best Vanguard ETFs: FAQS

What is the best Vanguard ETF to buy?

The best Vanguard ETF to buy depends on your definition of ‘best.’ The Vanguard Total Stock Market ETF (VTI) is best in terms of AUM, the S&P Small-Cap 600 Value ETF (VIOV) is best in terms of 1-year performance, and the Vanguard Information Technology ETF (VGT) is best in terms of technology exposure.

What are the best Vanguard ETFs for 2022?

The best Vanguard ETFs for 2022 is the Vanguard S&P 500 ETF (VOO) and the Vanguard Information Technology ETF (VGT).

What is the most aggressive Vanguard ETF?

Here’s a look at some of the most aggressive Vanguard ETFs:

• Vanguard Russell 1000 Growth ETF (VONG)
• Vanguard Mega Cap Growth ETF (MGK)
• Vanguard Growth ETF (VUG)
• Vanguard Information Technology ETF (VGT)
• Vanguard Small-Cap Growth ETF (VBK)

Bottom Line: Best Vanguard ETFs

The best Vanguard ETF depends on your investing goals and time horizon.

There isn’t a one-size-fits-all when it comes to investing, but Vanguard’s suite of funds probably fits most.

This article is for informational purposes only. It is not intended to be investment advice. To learn more about how we evaluated the best Vanguard exchange-traded funds, check out our unbiased research methodology and editorial guidelines. 

This article was updated on July 30th, 2022 to reflect the changes in performance, holdings, and other relevant characteristics of each fund.