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Best Vanguard ETFs to Buy UK

Some of the best Vanguard ETFs offered by Vanguard Asset Management can be a useful way for UK investors to invest across a broader range of asset classes and financial markets all at once, rather than having the pressure and expense of picking individual stocks and shares.

Here is my list of some of the best Vanguard ETFs to buy UK, along with a few simple steps to making your investment.

Also consider: Guide to ETFs for UK investors

10 of the best Vanguard ETFs to buy May 2024

Remember: this list is not a personal recommendation and does not constitute financial advice. Do not buy these investments solely based on what you read in this article. These picks do not constitute personal recommendations or financial advice.

1. Vanguard S&P 500 UCITS ETF (VUSA.L)

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  • Fund size: $28.69 billion
  • Expense ratio: 0.07%
  • Best for: Anyone who wants exposure to the largest companies on the US stock market.

The Vanguard S&P 500 Index Fund is one of Vanguard’s more popular equity funds, seeking to track the performance of the S&P 500.

The S&P 500 is regarded as a benchmark for the state of the US stock market. This is because it lists the 500 largest companies in the US, based on market capitalisation. Thanks to its equity exposure to the biggest US companies, this ETF is highly popular among retail investors.

A large-cap equity index fund, Vanguard’s 500 Index Fund has holdings in the same proportions as the S&P does in order to closely replicate its performance.

One of its biggest constituents is Tesla, an electric vehicle manufacturer and distributor that has seen sharp growth in recent years.

The fund’s performance has been up and down over the past couple of months and, when markets opened on 3 November 2022, one unit traded for £62.87.

Source: Forbes Advisor

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2. Vanguard Consumer Staples Fund (VDC)

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  • Fund size: $7.09 billion
  • Expense ratio: 0.1%
  • Best for: Investors who want to have exposure to popular, commonly-used brands that produce goods often considered to be household essentials.

The Vanguard Consumer Staples Fund attempts to track the MSCI US Investable Market Index Consumer Staples 25/50.

Companies that are included in this particular fund are a range of different sizes which means small-cap stocks are included alongside medium- and large-cap stocks.

All of the listed companies included in the Vanguard Consumer Staples fund are involved in everyday, high-usage items that are widely used across the market – known as “consumer staples”.

Companies that are included offer direct-to-customer products. This means the products they manufacture and sell are, more or less, essential items such as food or healthcare products.

One of the largest positions in this fund is Procter and Gamble, a company that manages consumer packaged goods. Procter and Gamble is often considered a “blue-chip” company, meaning it is a large company that typically offers less risk to investors than other options.

When markets opened on 3 November 2022, units in this ETF were worth $182.89.

Source: Financial Times

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Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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3. Vanguard Dividend Appreciation Index Fund ETF (VIG)

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  • Fund size: $67.63 billion
  • Expense ratio: 0.06%
  • Best for: Investors prioritising liquidity or monthly income, as this ETF has a focus on dividends.

Having been launched in 2006, the Dividend Appreciation Index Fund ETF offered by Vanguard is an equity fund that tracks the returns of an index comprised of common stocks with a track record of increasing their dividends over time.

In doing so, it aims to track the investment performance of the S&P’s “U.S. Dividend Growers Index”, a dividend-focused index.

Dividend ETFs can be useful for income investors seeking regular returns from their portfolio.

The company Johnson & Johnson, a multinational manufacturer of health and cleanliness products, sits at the top of its holdings. Also included in the holdings of this ETF are Amazon, Sea Limited, and Shopify.

As of 3 November 2022, units in this ETF were worth $144.04 when markets opened.

Source: Financial Times

Buy Vanguard ETFs via InvestEngine

  • Save on your Vanguard account fee
  • Invest online or via the app
  • Buy, sell or rebalance in just one click

Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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4. Vanguard Emerging Markets Government Bond ETF (VDET.L)

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  • Fund size: $2.8 billion
  • Expense ratio: 0.2%
  • Best for: Investors with considerable appetite for risk who seek to expand their portfolio’s exposure to international bonds in emerging markets.

One of Vanguard’s bond funds, the Emerging Markets Government Bond ETF could be useful for investors seeking to achieve a greater level of geographic diversity in their portfolio.

Emerging markets are located or primarily focused on areas of lower development such as Brazil, Indonesia, or China. Investment products in these types of markets usually offer higher interest rates because of the added risk of being an emerging market.

The results of investments in emerging markets are less predictable than those in more stable, developed areas. So, you must be willing to take on additional risk with your investment in these markets.

Whether the result of volatile politics or economic weakness, the added risk to your investment often results in higher interest rates on investments like bonds.

This fund owns Treasury bonds that are issued by emerging market governments and often have higher interest rates than those in more highly developed areas.

The Vanguard Emerging Markets Government Bond is a passive ETF which means it’s not actively managed by investment specialists, but rather simply tracks the performance of its underlying index like the majority of ETFs.

Since it automatically tracks the performance of the Bloomberg USD Emerging Markets Government RIC Capped Index, there is no need for it to be actively managed.

The fund owns around 750 bonds with an average duration of 8.2 years, most of which carry significant risk – in fact, 44% of the holdings have a bond credit rating lower than BBB while only 27% have a rating of A or AA.

One unit was worth $56.86 when markets opened on 3 November 2022.

Source: Forbes Advisor

Buy Vanguard ETFs via InvestEngine

  • Save on your Vanguard account fee
  • Invest online or via the app
  • Buy, sell or rebalance in just one click

Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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5. Vanguard Real Estate ETF (0LOD.L)

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  • Fund size: $61.99 billion
  • Expense ratio: 0.12%
  • Best for: Those who wish to invest in property, or increase their exposure to real estate, without owning physical buildings.

Vanguard even has an ETF that can give you exposure to the real estate market without owning physical property – the Vanguard Real Estate ETF.

It aims to track the performance of the MSCI Investable Market Real Estate 25/50 Index, and is comprised of stocks issued by real estate investment trusts (REITs) that are involved in types of buildings such as:

  • Commercial
  • Healthcare
  • Office
  • Storage
  • Industrial

The fund owns around 160 of these investments, while its 10 largest holdings comprise 43% of the index. This means that its funds are quite heavily concentrated among the primary constituents of the index.

Its top 10 holdings include:

  • Prologis
  • American Tower Corp
  • Crown Castle International
  • Equinix Inc
  • Public Storage
  • Digital Reality Trust.

Real estate funds could be considered to act as a hedge against inflation, as property and the real estate market are typically subject to different pressures in inflationary environments.

In addition to this, a real estate ETF could help to diversify your portfolio by giving exposure to the property market.

Similarly, it might be an affordable way for some investors to gain exposure to real estate when it may not have been possible otherwise – property can be expensive to buy, and often involves a great deal of administration to manage.

An ETF could solve this for a lot of investors seeking to invest in real estate, providing an accessible way into the market.

At the same time, such an ETF could offer better liquidity than owning an actual property, meaning it’s an investment that is a lot easier to buy, sell, and manage.

When markets opened on 3 November 2022, one unit was worth $79.93.

Source: Forbes Advisor

Buy Vanguard ETFs via InvestEngine

  • Save on your Vanguard account fee
  • Invest online or via the app
  • Buy, sell or rebalance in just one click

Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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6. Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)

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  • Fund size: $56.88 billion
  • Expense ratio: 0.04%
  • Best for: Investors that wish to speculate on US-issued securities protected from inflation.

During economic downturns or times of high inflation – among other reasons – the value of companies can change as consumer spending habits shift.

The Vanguard Short-Term Inflation-Protected Securities ETF aims to provide investors with stable returns, irrespective of inflation.

It’s a highly liquid fund and has a dividend yield of 5.97%. So, it could be considered a useful way to preserve the purchasing power of your cash while you invest.

The fund tracks the Bloomberg US 0-5 Year Treasury Inflation-Protected Securities (TIPS) Index and owns TIPS itself with an average duration of two and a half years.

During times of rising interest rates and inflation, the value of the fund increases as inflation does. This could help investors to offset the negative effects of higher interest rates.

On 3 November 2022, when markets opened, one unit was worth $47.47.

Source: Forbes Advisor

Buy Vanguard ETFs via InvestEngine

  • Save on your Vanguard account fee
  • Invest online or via the app
  • Buy, sell or rebalance in just one click

Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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7. Vanguard Total International Stock Index ETF (VXUS)

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  • Fund size: $308.48 billion
  • Expense ratio: 0.07%
  • Best for: Investors who want general exposure to international stock markets in developed as well as emerging markets, excluding the US.

Vanguard’s Total International Stocks ETF tracks the performance of the FTSE Global All Cap Ex. US Index.

Since US equities account for nearly 60% of the global stock market by market capitalization, it can sometimes be hard for investors to find companies outside of the US market that could be worth investing in.

Naturally, it can be more difficult to access or understand the nuances of international markets. So, by gaining exposure through an ETF, it could remove the pressure of selection.

ETFs comprised of international stocks can help to establish equity portfolio diversity outside of US markets.

A diversified portfolio could help to mitigate the negative effects when some of your investments lose value. By having investments in different areas that aren’t all exposed to the same risk, such diversity could be something worth considering to possibly provide some balance to a portfolio.

In total, this Vanguard fund has shares in approximately 7,900 non-US-based companies and offers a 3.73% dividend yield.

Regionally, this is how its holdings can be broken down:

  • 39.5% in European markets
  • 26.8% in Pacific markets
  • 25.2% in emerging markets
  • 8% in North American markets
  • 0.5% in Middle Eastern markets.

Its 10 largest holdings account for roughly 10% of the entire fund, including:

  • Nestle
  • Samsung
  • Roche Holdings
  • AG
  • Tencent Holdings
  • ASML Holdings

As of market open on 3 November 2022, one unit was worth $46.68.

Source: Forbes Advisor

Buy Vanguard ETFs via InvestEngine

  • Save on your Vanguard account fee
  • Invest online or via the app
  • Buy, sell or rebalance in just one click

Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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8. Vanguard Total Stock Market Index Fund (VTI)

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  • Fund size: $1.06 trillion
  • Expense ratio: 0.03%
  • Best for: Investors seeking exposure to the entire US stock market.

Created in 1992, the Vanguard Total Stock Market Index Fund is an ETF that invests a minimum of 80% of its net assets in securities.

This is achieved by tracking an index that comprises 100% of the investable companies in the US, while using a sampling strategy to invest in companies on the index.

The Total Stock Market Index Fund is designed to give exposure to the entire US equity market and incorporates small-, medium-, and large-cap companies. In doing so, it aims for both growth and value stocks.

Because of the breadth of companies included in the fund, it’s widely considered by investors to provide diversification in portfolios.

As of 3 November 2022, units in this fund traded for $186.50 at market open.

Source: U.S. News

Buy Vanguard ETFs via InvestEngine

  • Save on your Vanguard account fee
  • Invest online or via the app
  • Buy, sell or rebalance in just one click

Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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9. Vanguard U.S. Minimum Volatility ETF (VFMV)

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  • Fund size: $64.17 million
  • Expense ratio: 0.13%
  • Best for: Investors aiming to reduce their exposure to volatile stocks while adding some stability to their portfolio.

Market volatility is not always helpful to everyone and can be difficult for investors to avoid. In that case, you may want to consider this ETF.

Vanguard’s Minimum Volatility ETF aims to generate lower volatility than the comparable, market-cap-weighted Russell 3000 Index which covers roughly 98% of the stock market.

By limiting your exposure to volatile assets, it could add stability to your portfolio and potentially reduce the effect that market unpredictability can have on your investments. For some investors, this could provide valuable peace of mind.

The median market capitalisation of stocks in the fund is $41 billion, and it is comprised of small-, medium-, and large-cap stocks, with a 1.94% dividend yield.

The fund’s top 10 holdings include:

  • Williams Companies
  • Bristol-Myers Squibb
  • Eli and Lilly Co
  • Consolidated Edison
  • Amgen

As of 3 November 2022, one unit was worth $99.03.

Source: Forbes Advisor

Buy Vanguard ETFs via InvestEngine

  • Save on your Vanguard account fee
  • Invest online or via the app
  • Buy, sell or rebalance in just one click

Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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10. Vanguard Value Index Fund (VTV)

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  • Fund size: $132.28 billion
  • Expense ratio: 0.05%
  • Best for: Investors aiming to gain exposure to some of the biggest companies on the stock market.

Vanguard’s Value Index Fund is an ETF that aims to track the performance of the CRSP US Large Cap Value Index.

According to CRSP, its US Large Cap Value Index includes US companies that comprise the top 85% of investable market capitalisation. This can usually be a sign for investors as to which companies are currently the biggest in the US market.

The Value Index Fund invests in large US companies that grow at a slightly slower pace than others, as they could potentially be undervalued by other investors. This means that the stocks of a company may be trading at a lower price than it is truly worth, hence providing a good deal.

The Value Index Fund offered by Vanguard holds over $146 billion in net assets and has a dividend yield of 2.42%.

Of all of its holdings, Warren Buffett’s investment firm, Berkshire Hathaway, is one of the largest.

By the end of Q1 2022, 104 hedge funds held stakes worth around $19 billion in this Vanguard fund.

Upon market open on 3 November 2022, units in this fund were worth $134.85.

Source: U.S. News

Buy Vanguard ETFs via InvestEngine

  • Save on your Vanguard account fee
  • Invest online or via the app
  • Buy, sell or rebalance in just one click

Whenever you invest, your capital is at risk. Minimum investment £100, T&Cs apply.

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Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

How to buy Vanguard ETFs UK

Buying units in Vanguard ETFs is simple and straightforward. Follow my five-step guide below to investing in some of the most popular funds available on the market.

1. Open an investment account

In order to invest in Vanguard ETFs, you will first need to register an account with a broker or investment platform. There are many online options where you can create an account digitally, and could even include the Vanguard platform itself.

Some account features vary among different providers, such as fees or minimum investment requirements, so it’s important to know the details of the account before you register.

It can also be sensible to choose a provider that’s covered by the Financial Services Compensation Scheme (FSCS), ensuring you have some protection in the event that the platform collapses entirely.

2. Research different ETFs

Before investing, you should consider researching the Vanguard ETFs you are interested in. The funds listed in my guide can be a great start to finding the best Vanguard funds and ETFs.

You can also find details of even more of the ETFs that Vanguard offers on the Vanguard website.

3. Deposit funds

In order to invest in ETFs, you must deposit the money you wish to invest into your account. Here, you should be aware of any fees your provider may charge and any minimum deposit limits you will need to meet.

4. Decide how many units you will purchase

Next, you should determine how much exposure you want to your chosen ETF and choose the number of units you would like to buy.

Remember: you don’t need to invest your entire deposit at once.

5. Buy ETF units

Once you have decided on the ETF, how much you wish to invest, and how many units you intend to buy, you’re ready to purchase them.

Once you’ve completed your purchase, make sure they are part of your portfolio and that the transaction was successful.

After this, you should remember to monitor your position and keep an eye on any returns or losses your fund units may generate.

What are Vanguard ETFs?

The Vanguard Group is a popular investment fund provider and is among the largest global managers of mutual funds and ETFs.

Generally, Vanguard funds invest to track the performance of a certain index, such as the FTSE All-World or the S&P 500.

Founded by Jack Bogle in 1974, the company pioneered low-cost index fund investing and has since become very popular among investors. Indeed, according to Forbes, the company recorded an inflow of $328 billion in 2021.

In 1976, just two years later, Vanguard introduced the first index fund that was publicly available and allowed retail investment.

This was called the “First Index Investment Fund” which turned out to be the predecessor to the Vanguard S&P 500 – a fund tracking the performance of the popular index listing the 500 biggest companies in the US.

My guide shows you some of the best and most popular Vanguard funds, but there are also many more available on the market. This includes:

  • Vanguard ESG Global All Cap UCITS ETF
  • Vanguard FTSE 100 UCITS ETF
  • Vanguard FTSE All-World UCITS ETF
  • Vanguard Global Aggregate Bond UCITS ETF
  • Vanguard UK Gilt UCITS ETF
  • Vanguard Global Aggregate Bond UCITS ETF

Thanks to the firm’s longevity, Vanguard funds are often considered to be reputable financial instruments for investing.

Vanguard ETFs and index funds have recently risen in popularity among retail investors as a result of current market volatility.

ETFs could provide the necessary diversification for portfolios, as they have the potential to offer exposure to broader markets rather than specific companies.

Actively vs passively managed funds

One of the things that has made ETFs so popular is their cost-effectiveness, as they are considered to be “passive management” funds.

So, find out the difference between passive and active management below.

Actively managed funds

In order to try and outperform the wider market, some funds are “actively managed” meaning they may have professional investors to selectively add and remove stocks from the fund. These individuals are known as “fund managers”.

This could allow losing stocks to be removed and for winning stocks to be added as and when it’s needed.

By using active funds, it’s believed to provide better returns than index funds and other passive funds, in which the holdings are decided by an index (more on this below).

It can be comforting for some investors to know that there are active fund managers with professional experience presiding over your investments, removing the pressure from your shoulders.

One drawback, however, is that they often charge higher fees than other options. This fee can sometimes be too much or off-putting enough for investors to ignore the service. Fees aren’t normally much more than a low percentage, but this could add up quickly with large invested sums.

The fees you’re charged act as payment to the fund manager who oversees your portfolio.

Additionally, actively managed funds can involve higher risk as the manager tries to outperform other indexes with higher returns. You’ll need to be confident taking on this risk in your investments.

Passively managed funds

On the other hand, passive funds don’t have a professional investor overseeing the constituents of the fund. Instead, they track the performance of other indexes and benchmarks to closely replicate their price action.

Because of this, passive funds are normally cheaper to operate than actively managed funds, and charge lower fees as a result.

Index funds can even beat the returns offered by actively managed funds with managers, meaning you can achieve the same investment goals with a far smaller investment.

The majority of popular ETFs are passively managed funds.

Pros and cons of Vanguard ETFs

Pros

  • Vanguard has a long history in retail investment

Because of its long history in the investment and finance sector, the group offers a degree of security in regard to reliability and safety.

  • ETFs could offer diversity to your investment portfolio

You can often gain exposure to a wider group of equities through a Vanguard ETF, rather than buying lots of individual shares in individual companies. This could give you access to a whole sector of business, rather than trying to predict the success of a single company.

  • ETFs trade like stocks

Unlike some other equity products and funds, the prices of ETFs are updated throughout the day as opposed to only trading the closing price of an equity. This means they can be bought and traded throughout the day on an exchange, which is where the name “exchange-traded fund” comes from.

  • ETFs can often be cheaper than other investment options

ETFs often charge lower fees than other products, such as mutual funds. This is mainly because ETFs are normally passively managed, rather than actively presided over by a fund manager. This person charges fees for their services, which you won’t need to worry about with Vanguard ETFs.

Cons

  • Expense ratios can eat into your profits

While fees and expense ratios are typically lower than actively managed funds, they can still add up and reduce the returns you might receive from your own portfolio.

  • Not all ETFs offer the same degree of diversification

Some ETFs may limit the companies included in the fund to a certain market capitalisation. As a result, this could impede on the degree of diversification you initially anticipated.

  • You may not receive the same dividend benefits as you might with regular stocks

There are some ETFs that pay dividends, but they aren’t as common as regular, dividend-paying stocks. So, you’ll either need to choose dividend-paying ETFs, or select a different option entirely if you are an income investor.

Best-performing Vanguard ETFs to Buy UK FAQs

Can I buy Vanguard ETF units in the UK?

Yes, you can buy Vanguard ETF units in the UK. Simply search for the ETF you are interested in buying on your brokerage account and purchase the units you want.

Are Vanguard ETFs safe?

Vanguard ETFs are safe in that Vanguard itself is an established financial product provider, is fairly unlikely to collapse, and is covered by the FSCS. Even so, your investments are not guaranteed to provide returns and you may get back less than you invest.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

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