Best Vanguard ETFs to Buy UK

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

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

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

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

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

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

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

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

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