Top Performing Vanguard ETFs in July 2025
In the world of investing, Vanguard has made a name for itself as a leader in low-cost options. One such investment vehicle that has gained popularity is the Exchange-Traded Fund (ETF), a type of fund that offers numerous benefits for investors.
Vanguard ETFs are available not just through Vanguard itself, but through any broker, making them easily accessible for those looking to diversify their portfolios. These funds group assets, such as stocks or bonds, into one investment, providing a simple way to invest in a wide range of securities.
Two of Vanguard's most popular ETFs are the Vanguard Total International Bond ETF (BNDX) and the Vanguard Total Bond Market ETF (BND). BNDX uses hedging strategies and holds nearly 7,000 bonds with an average duration of 7.1 years, while BND tracks the performance of a broad bond index and holds over 10,000 bonds with an average duration of 6 years.
For those interested in international stocks, the Vanguard Total International Stock ETF (VXUS) tracks the FTSE Global All Cap ex U.S. Index and holds over 8,000 stocks, focusing on international companies. Meanwhile, the Vanguard Energy ETF (VDE) tracks the investment return of stocks of over 100 companies in the energy sector, with the two largest holdings being Exxon Mobil and Chevron.
Vanguard Real Estate ETF (VNQ) focuses on stocks of real estate investment trusts (REITs) and invests in about 160 real estate funds, while the Vanguard Information Technology ETF (VGT) follows more than 320 software, semiconductor, and other IT-focused companies, with more than a third of its holdings in Microsoft, Apple, and Nvidia stocks.
For investors seeking small-capitalization stocks, the Vanguard Small-Cap ETF (VB) tracks the CRSP US Small Cap Index and has more than 4,000 stocks, while the Vanguard Growth ETF (VUG) mirrors the performance of the CRSP US Large Cap Growth Index and contains nearly 200 high-growth companies.
One of the key advantages of Vanguard ETFs is their lower expense ratios compared to index mutual funds. Over half of the best-performing ETFs on the list saw their expense ratios fall, with examples including the Communication Services ETF (from 0.10% to 0.09%), Consumer Discretionary ETF (from 0.10% to 0.09%), and Financials ETF (from 0.10% to 0.09%).
Another benefit of Vanguard ETFs is their higher tax efficiency. Since ETFs are created and redeemed in kind, they can potentially reduce the taxable events that occur when shares are bought and sold, making them more attractive for tax-conscious investors.
Lastly, Vanguard ETFs offer greater intraday trading liquidity compared to index mutual funds. Buyers and sellers trade the ETF throughout the day on an exchange, much like a stock, allowing investors to buy or sell their holdings at any time during market hours.
In contrast, index mutual funds can only be bought or sold once per day after the market closes at the fund’s net asset value (NAV). This means they don't trade dynamically during the day but instead transact based on the calculated closing value of their underlying holdings.
In summary, while both Vanguard ETFs and Vanguard index funds aim to replicate the performance of a specific index and offer the benefits of diversification and passive management, Vanguard ETFs typically have lower expense ratios, higher tax efficiency, and greater intraday trading liquidity compared to index mutual funds. By choosing a Vanguard ETF, investors can instantly diversify their portfolios and potentially save on costs, all while enjoying the flexibility of trading throughout the day.
The fund with the lowest expense ratio is the Vanguard S&P 500 ETF (VOO), while the best-performing Vanguard ETF from the past year is the Vanguard Financials ETF (VFH), which is up 22.37%. Whether you're looking to invest in bonds, stocks, real estate, or technology, Vanguard ETFs offer a wide range of options to help you achieve your financial goals.
- For those interested in considering retirement planning, a Vanguard calculator could be an useful tool to estimate potential returns from various Vanguard ETFs, such as the Vanguard Total International Bond ETF (BNDX) and the Vanguard Total Stock Market ETF (VTSAX), within their investment portfolio.
- In the era of digital banking, some banking applications may enable users to easily invest in Vanguard ETFs, which could potentially contribute to long-term financial stability and prosperity.
- For educators seeking ways to promote financial literacy in their classrooms, using real-world examples of ETFs like the Vanguard Information Technology ETF (VGT) or the Vanguard Real Estate ETF (VNQ) could help illustrate the importance and benefits of investing and diversification in various sectors.
- As part of a well-rounded investment strategy, some advisors might recommend including a mix of index funds and ETFs provided by Vanguard, such as the Vanguard 500 Index Fund (VFIAX) or the Vanguard FTSE All-World ex-US Index ETF (VEU), to ensure a well-diversified and cost-effective portfolio balanced in finance and investing.
