7 Best Vanguard Funds for Beginner Investors

Sat 2-3-24

Once again, getting back to basics ... 

JANUARY 31, 2024 Invested Advice, rankings and stock market news for investors.

Good morning, investors. Markets trade sideways as investors wait on Big Tech earnings. Highlights of today's newsletter include our market insights plus these new articles: 7 Best Vanguard Funds for Beginner Investors How Do Conflicts and War Affect Stocks? How Much Would $10,000 Invested in Amazon (AMZN) Stock 20 Years Ago Be Worth Today? ETF vs. Stock: Which Is Better for Your Portfolio? Angel Investor Definition TODAY'S FEATURED STORY With a robust lineup of 267 mutual funds, Vanguard has established itself as a leader in providing investment options that are both accessible and effective for beginners. The firm's unique structure as a shareholder-owned company allows it to focus on continually cutting fees, further benefiting its investors. "Beginner investors should consider Vanguard funds for their low costs, diversification across asset classes and regions, simplicity, and robust investor education resources," says Sean August, CEO of The August Wealth Management Group. "In addition, Vanguard's reputable status and client-owned mutual structure helps instill trust and prioritizes investor interests." Here are seven of the best Vanguard funds for beginner investors: Vanguard 500 Index Fund Admiral Shares (ticker: VFIAX). August recommends that beginner investors undertake a two-step process when selecting funds for their portfolio. "Firstly, assessing the fund's investment objective is crucial to ensure alignment with personal investment goals, whether it involves growth, income or a combination of both," August says. "Next, evaluate the fund's risk profile to match it with your risk tolerance, and compare expense ratios." For younger investors looking for long-term growth and willing to take higher risk, a 100%-domestic-equity fund like VFIAX could be a viable core holding. This mutual fund tracks the S&P 500 index for a low 0.04% expense ratio and has returned 12% annualized over the trailing 10 years. It requires a $3,000 minimum investment, but it can be accessed in ETF form for around $451 per share. Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX). "We believe investors can benefit from the diversification of a market-weighted portfolio that provides exposure to the broader market," says Sophoan Prak, a certified financial planner at Vanguard. "For example, investors who buy VTSAX obtain broad exposure to large-, mid- and small-cap U.S. companies, providing a good representation of the broader domestic market." The CRSP U.S. Total Market Index tracked by VTSAX is meant to serve as an all-encompassing barometer of the investable U.S. market. It includes the stocks found in the S&P 500, but also thousands of other mid- and small-cap stocks excluded by the index. Historically, VTSAX has returned similar to VFIAX, with an 11.4% 10-year annualized return. The fund also charges a 0.04% expense ratio. Click here to continue reading.   FUND                                                                    EXPENSE RATIO Vanguard 500 Index Fund Admiral Shares (ticker: VFIAX)    0.04% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)                                                                                0.04% Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)                                                                                  0.11% Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)                                                                                                    0.05% Vanguard Target Retirement 2070 Fund (VSVNX)                0.08% Vanguard Balanced Index Fund Admiral Shares (VBIAX)     0.07% Vanguard Dividend Growth Fund (VDIGX)                             0.3%