7 Vanguard ETFs For Buy-and-Hold Investors

Fortunately, many Vanguard ETFs offer those traits and do so with nominal fees. With approximately ETFs in its house, Vanguard has plenty of funds for conservative buy-and-hold investors to consider, spanning both equities and fixed income. Consider some of the following funds for your Vanguard buy-and-hold portfolio. 27.1 billion in assets under management at the end of the first quarter, the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) is the largest dividend ETF in the world. VIG is one of several compelling income options in the Vanguard lineup.
VIG is a favorite among dividend investors for a couple of reasons. First, its 0.08% annual fee makes it cheaper than 92% of competing strategies. Second, this Vanguard fund focuses on steady dividend growers. “VIG, which tracks a Nasdaq US Dividend Achievers index that requires ten years of dividend increases, recently had a 14% weighting in the technology sector. Accenture, Microsoft and Texas Instruments are some of the larger holdings, joined by industrials (30% of assets),” according to CFRA Research.
While VIG components are required to have dividend increase streaks of at least 10 years, many of its holdings, such as Johnson & Johnson (NYSE:JNJ) and PepsiCo Inc. (NASDAQ:PEP), have payout increase streaks that can be measured in decades. Over long holding periods, one of the most efficacious factor combinations is small size and value.
In fact, some academic research and historical data points suggest the small-cap value combination is the best factor play over the long term. Investors can tap that theme with the Vanguard Small-Cap Value (NYSEARCA:VBR). VBR tracks the CRSP US Small Cap Value Index and holds nearly 900 stocks. 3.8 billion, well into mid-cap territory.
VBR allocates 31.30% of its weight to financial stocks and another 19.70% to industrials. Keeping with the value theme, the Vanguard Value ETF (NYSEARCA:VTV) is the large-cap answer to the aforementioned VBR and one of the largest value ETFs in the U.S. 98.6 billion on its 337 components. VTV shares a trait with many of its value rivals: a large allocation to financial services stocks. That sector represents over a quarter of the fund’s weight.
Perhaps surprisingly, VTV’s second-largest sector weight is technology at 14.50%, indicating mature tech companies such as Microsoft Corporation (NASDAQ:MSFT) and Intel Corporation (NASDAQ:INTC) are not as richly valued as their growthier peers. Investors considering VTV right now, or any value strategy for that matter, should note the value factor has lagged growth and momentum for several years. However, that condition will not be permanent, which could mean VTV could be a solid idea for long-term investors. Vanguard has plenty of offerings for globe-trotting investors and one of the most prominent is the Vanguard FTSE Developed Markets ETF (NYSEARCA:VEA).
This Vanguard ETF is ideal for investors looking broad-based exposure to ex-U.S. 3,900 stocks spanning large, mid- and small cap. Regionally speaking, VEA devotes 91% of its combined weight to Europe and developed Asia-Pacific. The fund competes with MSCI EAFE strategies, but there is a significant difference between VEA and MSCI EAFE tracking funds: VEA includes Canada on its roster, but the MSIC EAFE Index does not.
45.4 million in assets should not be viewed as an indictment. Actually, VTC makes life easy on income investors. This Vanguard ETF is comprised of the issuer’s other corporate bond exchange-traded funds, giving investors exposure to over 5,000 high-grade corporate bonds across myriad durations. VTC’s average duration is 7.6 years and its average effective maturity is 11.3 years.
VTC has a 30-day SEC yield of 3.28%, below the 3.86% found on the largest corporate bond ETF, according to Morningstar data. The S&P 500 is a useful index. It provides investors with exposure to just over 500 of the largest U.S. The thing is there are way more than 500 publicly traded companies listed in the U.S.
