9 Best Vanguard Mutual Funds (2024)

The Vanguard Russell 1000 Growth Index Fund charges very low costs—check out that 0.07% annual expense ratio—and tracks some of the biggest growth stocks in the U.S.

VRGWX’s 10-year average annual return of 14.65% beats the S&P 500’s 12.39% return over the same period, making it Vanguard’s top-performing diversified stock fund. Over the long haul, this fund has proven its ability to add outperformance to your retirement portfolio.

If you want to own investments that reflect your values, the Vanguard FTSE Social Index Fund is worth a look. This fund tracks the FTSE4Good US Select Index, and holds large- and mid-cap stocks that satisfy environmental, social, and corporate governance criteria.

As one of Vanguard’s premier ESG funds, VFTNX avoids stock in companies engaged in adult entertainment, alcohol, tobacco, cannabis, gambling, weapons and nuclear power, as well as companies that are involved with coal, oil or natural gas. It also excludes stock of companies that do not meet certain labor, human rights, diversity and environmental requirements.

The fund’s 12.86% average annual return makes it Vanguard’s top ESG fund by performance over the past decade.

Want dividend income as well as growth of principal? If so, the Vanguard Growth & Income Fund is built for you. This is a classic core holding for a retirement portfolio, and the fund offers excellent diversification, holding nearly 1,700 stocks.

VGIAX’s one-two punch of investment goals has helped it beat the overall stock market in 2022. Still, the outperformance came from losing less than the broad market, -17.1% versus the S&P 500’s -18.1% loss. Over the past 10 years, this fund is about even with the S&P 500, 12.32% vs. 12.39%. Meanwhile, its trailing 12-month dividend yield roughly matches the broad market’s.

Increasingly, retirement investors are flocking to target date funds. Many appreciate that professional managers handle picking investments and shifting from riskier stocks into more stable bonds and cash as the target date nears.

The Vanguard Target Retirement 2050 Fund tames costs by investing only in Vanguard funds, rather than individual securities. As of January 2022, it was holding 89.5% of shareholder money in stocks, 9.4% in bonds, and the balance in cash-like assets. And you’ve got to love that nice, low expense ratio!

Remember, this fund provides income and stability as well as growth, so don’t overlook it just because its 8.42% 10-year average annual return lags the S&P 500’s performance.

The Vanguard High-Yield Corporate Fund is the company’s top performing bond fund over the past decade, featuring a high-yield, intermediate-term fixed income portfolio.

High-yield funds have a reputation for volatility due to their penchant for junk bonds. But in a crazy-volatile 2022, this fund was practically a Rock of Gibraltar, limiting its loss to 8.97% while markets cratered. Its secret? VWEAX is run by a team from Wellington Management, which tries to stick to higher-rated junk bonds. The idea is to score consistent income while minimizing defaults and loss of principal.

The Vanguard High-Yield Tax-Exempt Fund has been a top-performing municipal bond fund over the past decade, with a 3.05% average annual return. The fund’s marching orders are to generate a sustainable, high level of income that is exempt from the IRS’s clutches.

The lower credit quality of many of VWALX’s holdings helps generate a higher yield, but this also means that the fund can be a little more volatile than its category average. Still, the fund wants shareholders to be able to sleep at night, so it invests at least 80% of its assets in investment-grade municipal bonds to dampen volatility.

The Vanguard Explorer Fund focus on smaller-cap stocks makes this fund a natural supplement to funds in this list that feast on bigger stocks. Its impressive average annual returns over the past decade makes it Vanguard’s top-performing diversified U.S. small-cap portfolio.

Smaller companies typically have a tougher go in hostile markets. They lack the financial heft that helps large-cap names survive hard times, and tend not to offer higher dividends that lure investors amid rocky markets. This fund’s trailing 12-month yield is a modest 0.46%. But in the long run, this strong fund diversifies your portfolio.

Founded in 1929, the Vanguard Wellington Fund is not only the company’s oldest mutual fund offering but also the oldest fund of its kind in the U.S. About two-thirds of this balanced fund’s portfolio consists of stocks and the rest are bonds. Both asset classes are well diversified within the fund.

VWELX’s longer-run returns are the best of the company’s balanced funds, also known as an allocation fund for its mix of stocks and bonds. This fund sits in the moderate allocation category, meaning that it puts 50% to 70% of its money into stocks, a level deemed neither too conservative (sacrificing potential growth) nor too aggressive (risking too much volatility).

The Vanguard Tax-Managed Capital Appreciation Fund is specifically designed to minimize your tax bill. That’s important if you own shares in a taxable brokerage account rather than a 401(k) or other defined contribution retirement plan.

VTCIX tracks the Russell 1000 Index, which helps minimize capital gains by keeping turnover low. And the fund prefers stocks that pay lower dividends. But note that the fund’s exposure to mid-cap stocks can add volatility to the portfolio. Its 12.4% average annual return over the past decade makes this Vanguard’s top-performing tax-managed portfolio.