In October 1974, Paul Samuleson, a Nobel laureate in economic sciences, published a paper in the The Journal of Portfolio Management calling for the creation of a portfolio that tracks the S&P 500 index. John Bogle, the founder of the Vanguard Group, realized the wisdom of Samuleson's clarion call.
This pivotal moment in history ultimately led Bogle down a path that would see him play a key role in the advent and subsequent explosion in the number of exchange-traded funds (ETFs) available to mom-and-pop investors.
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Today, ETFs are widely used by lay and professional investors alike to gain exposure to a wide swath of stocks, particular themes, or markets in a low-cost, tax-efficient manner. One of the most popular providers is Bogle's Vanguard group.
Here is a broad rundown of the fund's key metrics, along with its best and worst performing portfolios in 2024. This analysis highlights why Vanguard is often the provider of choice for many stock investors.
Vanguard ETFs: Cheapest and most expensive to own
Vanguard offers 86 ETFs at present. Within its ETF family, 50 are categorized as "stock ETFs", meaning the bulk of their assets are equities. All of Vanguard's stock ETFs carry a risk factor of 4 on Vanguard's own risk assessment scale, which ranges from 1 to 5, indicating moderate to high levels of risk.
What are Vanguard's cheapest stock ETFs from an expense ratio perspective? The Vanguard S&P 500 (NYSEMKT:VOO) and the Vanguard Total Stock Market Index Fund ETF Shares (NYSEMKT:VTI) are the fund's cheapest stock ETFs, both with an expense ratio of 0.03%.
Most expensive to own? The Vanguard International High Dividend Yield Index Fund ETF Shares (NASDAQ:VYMI) and the Vanguard U.S. Multifactor ETF Shares (NYSEMKT:VFMF) are the fund's most expensive offerings, with expense ratios of 0.22% and 0.18%, respectively.
Still, the Vanguard International High Dividend Yield Index Fund ETF Shares and the Vanguard U.S. Multifactor ETF Shares are markedly cheaper than their category average, reflecting the low-cost nature of Vanguard funds at large.
Best and worst performers in 2024
What are the fund family's top performers in 2024? The Vanguard S&P 500 Growth Index Fund ETF Shares (NYSEMKT:VOOG), Vanguard Mega Cap Growth Index Fund (NYSEMKT:MGK), and the Vanguard Russell 1000 Growth Index Fund ETF Shares (NASDAQ:VONG) are the best performers halfway through 2024.
As of this writing, the Vanguard S&P 500 Growth Index Fund ETF Shares has delivered total returns of 27.7% (including distributions); the Vanguard Mega Cap Growth Index Fund has jumped by 25.2%; and the Vanguard Russell 1000 Growth Index Fund ETF Shares has risen by 24.6%.
Worst performers in 2024? The Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares (NYSEMKT:VIOV), Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares (NASDAQ:VNQI), and the Vanguard S&P Small-Cap 600 Index Fund ETF Shares (NYSEMKT:VIOO) are the fund family's three worst performers at the mid-point of 2024.
The Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares has dipped by 0.66%, while the Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares has risen by a modest 1% year-to-date. The Vanguard S&P Small-Cap 600 Index Fund ETF Shares has edged higher by around 3.3% in 2024.
Key takeaways
Vanguard ETFs are cost- and tax-efficient vehicles that offer shareholders a straightforward way to gain exposure to stocks. Their performance is also quite remarkable. Most of the fund's "worst performers" have still managed to generate positive returns this year, which isn't commonplace in the diverse ETF landscape.
Vanguard's "expensive" funds are also substantially cheaper than most alternatives in the same category, reflecting the company's emphasis on delivering industry-low costs. These low costs are an integral component of Vanguard's stellar performance as a fund family, making this ETF provider an ideal choice for most nonprofessionals.
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George Budwell has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard Index Funds-Vanguard Total Stock Market ETF and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
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