11 Best Vanguard Funds for the Everyday Investor

Some things just belong together. Peanut butter and jelly. Spaghetti and meatballs. Vanguard and low fees.

Vanguard’s name has become synonymous with thin investment expenses. Indeed, if you’re seeking out the best Vanguard funds—which, I don’t know why else you’d be reading this article—you almost certainly expect to read about not just great products, but great, cost-effective products.

Vanguard has earned that expectation. The fund provider has built its reputation in large part by innovating a product (the index fund) that could drastically lower fees, but also in part by continuing to find ways to grind all fund expenses, index and actively managed alike, to the bone.

But I’ll be real with you: Cheap, by its lonesome, is crap. Investors have funneled trillions of dollars into Vanguard Group because Vanguard’s mutual funds and exchange-traded funds (ETFs) charge low expense ratios for high-quality strategies. That potent combination drives outperformance in many Vanguard funds while ensuring investors get to keep more of those returns.

Today, I’m going to explore some of the best Vanguard mutual funds to buy for 2026—a collection of passive and active products that are built for success without breaking the bank. This group of funds also fills multiple needs, with some serving as core portfolio holdings, and others acting as satellite positions you can use to focus on specific opportunities.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Why Vanguard?

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Vanguard Group is one of the largest asset managers in the world, currently boasting $12 trillion in assets under management (AUM).

Again, one of the primary drivers of that success is Vanguard’s dirt-cheap expenses. The average asset-weighted expense ratio for U.S. mutual funds and ETFs is 0.44%, which translates to $4.40 annually for every $1,000 invested. Vanguard’s average, across 400-plus funds, is a scant 0.06%, or a mere 60¢ annually per $1,000 invested. That’s an astoundingly low number—one that suggests that even when a Vanguard fund isn’t the absolute cheapest in its category, it’s still going to be one of your most cost-effective options.

That low average fee is baby-fresh, too. Vanguard’s average expense ratio was 0.08% in 2024, then declined to 0.07% in 2025 after Vanguard cut expenses on 168 share classes across 87 funds. Its drop to 0.06% occurred in early 2026 when the company announced it would slash fees on another 84 share classes across 53 funds. All told, Vanguard estimates that’s $600 million in savings for investors, which the firm claims is its “largest-ever two-year combined cost reduction.”

Much of Vanguard’s success on the fee-fighting front can be chalked up to founder Jack Bogle, who created the first index mutual fund and helped proliferate this fund type. Now, low-cost index funds can be found the world over, bringing costs down for millions of investors—even those who don’t buy Vanguard’s products.

But Bogle, too, was responsible for more than just cheap investing. His investment philosophies helped shape Vanguard into the titan it is today, and sparked a group (the Bogleheads) who energetically follow in his footsteps.

Related: The 13 Best Mutual Funds You Can Buy for 2026

How Were the Best Vanguard Mutual Funds Selected?

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Vanguard currently boasts more than 300 mutual funds—not exactly the easiest number to whittle down to a handful.

So, as I normally do, I’ve started by booting up Morningstar Investor and running a quality screen that I customize for every search. In this case, I began by including only Vanguard mutual funds that have earned the top Morningstar Medalist rating of Gold. Unlike Morningstar’s Star ratings, which are based upon past performance, Morningstar Medalist ratings are a forward-looking analytical view of a fund. Per Morningstar:

“For actively managed funds, the top three ratings of Gold, Silver, and Bronze all indicate that our analysts expect the rated investment vehicle to produce positive alpha relative to its Morningstar Category index over the long term, meaning a period of at least five years. For passive strategies, the same ratings indicate that we expect the fund to deliver alpha relative to its Morningstar Category index that is above the lesser of the category median or zero over the long term.”

As I’ve written in other Young and the Invested articles, a Medalist rating doesn’t mean Morningstar is necessarily bullish on the underlying asset class or categorization. It’s merely an expression of confidence in the fund compared to its peers.

Also, because one of the primary draws of Vanguard funds is low fees, I am only considering funds whose expense ratios are well below their category average. Honestly, this didn’t do much to narrow the list, as most Vanguard mutual funds are … well, you get the point. So, from the remaining universe of several dozen Vanguard funds, I selected a range of products that fit various portfolio goals, are directed by respected fund managers (active) or productive benchmark indexes (passive), and have good to great track records.

Lastly, all Vanguard funds listed here have a $3,000 minimum initial investment. If that’s too high for you, read on anyways, as many of these products have ETF-class shares you can purchase for the price of one share.

* Vanguard funds selected for 2026 all had Gold Medalist ratings as of late December 2025. Funds will remain on the list throughout 2026 as long as they maintain a minimum of Silver. Funds that fall below that threshold will be replaced.

Related: The 10 Best Vanguard Index Funds You Can Buy

1. Vanguard 500 Index Fund Admiral Shares

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• Style: U.S. large-cap stock
• Management: Index
• Assets under management: $1.4 trillion*
• Dividend yield: 1.2%
• Expense ratio: 0.04%, or 40¢ per year for every $1,000 invested

The Vanguard 500 Index Fund Admiral Shares (VFIAX) is the very first index fund, but it still stands up to scrutiny today. Indeed, it enjoys top billing among Vanguard’s best mutual funds.

VFIAX tracks the S&P 500—a collection of 500 of America’s largest companies that have met certain size, liquidity, and earnings criteria. This index, which has been around since the 1950s, is considered a reflection of the U.S. economy. But it also serves as the benchmark for many large-cap fund managers, and most of those managers simply can’t beat that benchmark on a consistent basis, particularly after fees. According to year-end 2025 data from S&P Dow Jones Indices’ SPIVA (S&P Indices versus Active), only 14% of actively managed large-cap funds have beaten the S&P 500 over the trailing 10-year period, and that number shrinks to 10% when looking at the trailing 15 years.

And if the pros can’t beat it, we might as well just join it.

Related: How to Invest for (and in) Retirement

The S&P 500 isn’t a perfect representation of the U.S. economy, however, nor is our economy perfectly balanced among sectors. The index is “market cap-weighted,” which means the larger the company, the more weight the stock has in the index and thus the more impact it has on returns. Consider this: Technology companies—including top holdings Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT)—make up a third of VFIAX’s assets. Conversely, real estate, materials, and utilities are weighted at less than 3% apiece.

More broadly, VFIAX is mostly made up of large-cap stocks** whose market caps are measured in tens or hundreds of billions, or even trillions, of dollars. It’s also considered to be a “blend” fund, which means it has relatively even exposure to value stocks and growth stocks. Because of this diversity of holdings, the S&P 500 also offers a modest level of dividend income. The yield might not seem like much, but reinvested over time, the S&P 500’s dividends have made up roughly 35% to 50% of the index’s returns over the very long term (depending on the time period and study you’re looking at).

Turnover—how much the fund tends to buy and sell holdings—is extremely low, too. Turnover generates capital gains that the fund must distribute to shareholders, and these distributions are subject to capital gains taxes if the fund is held in a taxable account. However, index funds typically trade less than actively managed funds in the first place, and the S&P 500 is extremely stable, only churning out about 3% to 4% of its holdings every year. This makes VFIAX and other S&P 500 trackers exceedingly tax-efficient, and thus optimal for taxable brokerage accounts. (Of course, there’s nothing wrong with holding them in tax-advantaged retirement accounts, either.) 

I’ll also note that, like many Vanguard mutual funds, VFIAX also trades as an ETF: the Vanguard S&P 500 ETF (VOO, 0.03% expense ratio), which currently trades at around $605 per share.

* Many Vanguard funds have multiple share classes, including ETFs. Listed net assets for Vanguard funds in this story refer to assets under management across all of a given fund’s share classes.

** There are different ways to define “cap” levels. We’re adhering to Morningstar’s definition, which says the largest 70% of companies by market capitalization within a fund’s “style” are large-caps, the next 20% by market cap are mid-caps, and the smallest 10% by market cap are small caps.

Want to learn more about VFIAX? Check out the Vanguard provider site.

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2. Vanguard Dividend Growth Fund Investor Shares

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• Style: U.S. large-cap dividend-growth stock
• Management: Active
• Assets under management: $35.9 billion
• Dividend yield: 1.6%
• Expense ratio: 0.22%, or $2.20 per year for every $1,000 invested

It’d be understandable to assume all dividend funds prioritize yield. Income is what sets dividend stocks apart from their non-paying brethren, and dividend yield is generally one of the first metrics people look at when evaluating these companies.

But that’s not the case. Some dividend funds are centered around other characteristics.

Consider a Vanguard dividend fund that delivers a pretty shrugworthy yield right now: the Vanguard Dividend Growth Investor Shares (VDIGX). Vanguard says the actively managed VDIGX “focuses on high-quality companies that have both the ability and the commitment to grow their dividends over time.” In other words, the fund might not have a great yield now, but owners of this fund should enjoy a higher “yield on cost” (the yield you’re actually earning based on the price you bought the stock) as the years roll on.

Also, dividend-growth stocks tend to be high-quality companies; only firms with strong financials and excellent cash flows can afford to keep paying shareholders more every year. So, in a way, dividend growth acts like a quality screen, of sorts, ensuring you’re owning a higher grade of stock.

Portfolio Manager Peter Fisher has a tight holding set of 48 predominantly mega-cap equities with bulletproof balance sheets. All of them have raised their payouts for at least a few years, but some have long histories of uninterrupted dividend growth. VDIGX holds not only Dividend Aristocrats (companies that have raised their dividends annually for at least 25 consecutive years), but even a few Dividend Kings (50 years) such as Procter & Gamble (PG) and Colgate-Palmolive (CL).

Turnover is currently a moderate 40%, which implies that in any given year, it cycles out 40 of every 100 holdings. Vanguard Dividend Growth does make capital-gains distributions, then, and they were particularly outsized in 2024 and 2025. So while you might be OK holding VDIGX in taxable accounts in most years, it’s likely a better fit for tax-advantaged accounts such as IRAs and 401(k)s.

It’s worth noting that Morningstar recently downgraded the fund from Gold to Silver, so I’ll be keeping a closer eye on it. The demotion has come amid a difficult three-year period for VDIGX, which included—but started before—a change in leadership from longtime manager Donald Kilbride to Fisher. Here’s what Morningstar Senior Analyst Todd Trubey says in a note titled “Still very good, but not elite”:

“Over these past three difficult years for the approach, the U.S. large-cap market environment has been unusual. It became highly concentrated and narrow, with massive rallies and brief, sharp downturns. Fisher’s steadiness at the helm should help this strategy in the long run, but the recent struggles somewhat weaken our conviction in the strategy.”

As I mentioned above, all funds on this list started 2026 with Gold ratings and will remain on the list through the year unless they’re downgraded to Bronze or below. But I’ll also mention that Vanguard does have another Gold-rated dividend-growth fund: Vanguard Dividend Appreciation Index Fund Admiral Shares (VDADX).

Want to learn more about VDIGX? Check out the Vanguard provider site.

Related: 7 Best High-Yield Dividend Stocks: The Pros’ Picks for 2026

3. Vanguard High Dividend Yield Index Fund Admiral Shares

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• Style: U.S. large-cap dividend stock
• Management: Index
• Assets under management: $88.7 billion
• Dividend yield: 2.4%
• Expense ratio: 0.08%, or 80¢ per year for every $1,000 invested

If you’re more interested in securing a higher yield now, the Vanguard High Dividend Yield Index Fund Admiral Shares (VHYAX) is going to be one of the best Vanguard funds you can find.

As the name implies, Vanguard High Dividend Yield Index is focused on delivering more income. It does so through a list of 560 total components that are picked based on their current income potential—not hopes of bigger future paydays. (However, many VHYAX holdings grow their dividends, too.)

That means this Vanguard index fund excludes companies like Apple that pay dividends but offer only modest yield, and instead is biased toward companies such as JPMorgan Chase (JPM) and Exxon Mobil (XOM) that pay significantly more than the average large-cap stock.

Vanguard High Dividend Yield Index’s focus on income results in a different sector mix than the above funds. For instance, financial companies make up more than 20% of holdings, followed by double-digit weightings in the industrial, technology, health care, and consumer staples sectors.

VHYAX is offered in ETF form, too: The Vanguard High Dividend Yield ETF (VYM, 0.04% expense ratio) trades around $150 per share.

Want to learn more about VHYAX? Check out the Vanguard provider site.

Related: The 11 Best Fidelity Funds You Can Own

4. Vanguard Strategic Small-Cap Equity Fund

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• Style: U.S. small-cap stock
• Management: Active
• Assets under management: $2.5 billion
• Dividend yield: 1.0%
• Expense ratio: 0.21%, or $2.10 per year for every $1,000 invested

If your primary investing concern is growth, and you have a pretty healthy risk appetite, you might get more bang for your buck by investing in small-cap stocks.

As a general rule, smaller companies have more growth potential than larger firms. For one, as they say, it’s much easier to double your revenues from $1 million than $1 billion. And as these stocks become noticed by institutional investors and fund managers, or begin qualifying for certain indexes, they can begin to enjoy large-scale investments that drive their prices even higher.

The rub is that smaller stocks tend to be more volatile. A smaller company’s revenues might be dependent on just one or two products or services—meaning a single disruption could have massive financial consequences. Small caps also have less access to capital than their larger peers, so they’re less likely to get a lifeline should they suffer from broader economic headwinds.

Buying these kinds of stocks individually is a high-risk, high-reward proposal—a company could feasibly double or get cut in half overnight. But if you wanted to harness some of the upside potential of small caps while tamping down risk, you could invest in a small-company fund like the Vanguard Strategic Small-Cap Equity Fund (VSTCX).

VSTCX, managed by Cesar Orosco, invests in roughly 625 small-cap equities that can be found within the MSCI US Small Cap 1750 Index. Orosco selects stocks that have similar risk to the index, but that he believes will provide better performance. The result is a diversified portfolio blending value stocks and growth stocks that have produced much better earnings growth as a whole than the benchmark index’s average.

Toss in top-90th-percentile performance over the trailing three-, five-, and 15-year periods, as well as exceedingly low management fees compared to its peers, and Strategic Small-Cap Equity easily rates among the best Vanguard mutual funds I’ve reviewed.

Just note that, like with many small-cap funds, turnover is on the high side at around 65%, so this is best held in tax-advantaged accounts like an individual retirement account (IRA), health savings account (HSA), or, if available, a 401(k).

Want to learn more about VSTCX? Check out the Vanguard provider site.

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Related: 7 Best Fidelity Index Funds for Beginners

5. Vanguard Mid-Cap Index Fund Admiral Shares

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• Style: U.S. mid-cap stock
• Management: Index
• Assets under management: $198.2 billion
• Dividend yield: 1.5%
• Expense ratio: 0.05%, or 50¢ per year for every $1,000 invested

Mid-cap stocks are the “Goldilocks” holding of the investment world. They’re bigger, more stable, and have better access to capital than their small-cap brethren, but they tend to be nimbler and have more upside potential to their big brothers in the large-cap space. Unfortunately, they often go ignored by people who gravitate either toward big, “safe” blue chips or potent small-caps … to their detriment.

Big mistake.

Here’s what Oregon-based equity manager Jensen Investment Management found in a study of mid-caps: “Since 1978, mid-cap stocks have outperformed small-caps over each of these rolling time periods: five, 10, 20, 30 and 40 years. They’ve even bested large-caps over the 30- and 40-year windows. These returns came with lower volatility than small-caps as well, making the evidence even more compelling. That means mid-caps haven’t just delivered better performance—they’ve done it more consistently, with fewer drawdowns.”

If you’d like to inject your portfolio with some mid-cap exposure, you can do so cost-effectively with the Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX).

This Gold-rated fund owns about 290 stocks. It’s not a pure mid-cap fund, with roughly 10% to 15% of assets veering into large-cap territory. VIMAX also boasts less concentration among top holdings than similar funds. Single-stock concentrations are generally minimal, though a handful of stocks—including miner Newmont (NEM) and glassmaker Corning (GLW)—are currently weighted above 1%.

Again, as is common among Vanguard index mutual funds, VIMAX has a sister ETF: the Vanguard Mid-Cap ETF (VO, 0.03% expense ratio). VO currently trades around $290 per share, but it will undergo a 4-for-1 share split on April 21, which will put its share price closer to $70.

Want to learn more about VIMAX? Check out the Vanguard provider site.

Related: 7 Best Closed-End Funds (CEFs) to Buy for 2026

6. Vanguard Strategic Equity Fund Investor Shares

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• Style: U.S. small- and mid-cap stock
• Management: Active
• Assets under management: $10.1 billion
• Dividend yield: 1.2%
• Expense ratio: 0.17%, or $1.70 per year for every $1,000 invested

Another way to go about getting your small and mid-cap (“SMID”) exposure in one place is the Vanguard Strategic Equity Fund Investor Shares (VSEQX), also managed by VSTCX’s Orosco.

Orosco takes a quantitative approach here. He uses a computer-driven stock selection process, hunting down attractive stocks within an MSCI index of SMID companies that he believes is capable of above-average growth. His system evaluates other variables, too, including improving fundamentals and attractive valuation. 

VSEQX currently holds about 600 positions, split roughly 65/35 between small caps and mid-caps. Sector weights are largely in line with the category—technology, financials, and industrials enjoy the greatest slices of assets. And despite VSEQX’s focus on smaller-sized companies, there are still numerous recognizable names, including eBay (EBAY), Expedia (EXPE), and Roku (ROKU).

Related: 14 Best Investing Research & Stock Analysis Websites

Orosco has only managed the fund since 2021 but has largely kept up the fund’s outstanding track record of performance. VSEQX sits within the top 15% of category funds over the trailing three-year period; it’s at the top 10% or better in the trailing five-, 10-, and 15-year periods.

“Orosco joined Vanguard’s QEG in April 2020 after a decade as a principal running systematic models at quant value firm AJO. He became a named manager here in February 2021 and a solo skipper later that year after managers James Stetler and Binbin Guo retired in June and September, respectively. Because he hadn’t spent a lot of time in QEG, Orosco brought a fresh, new perspective. And he brings a rare combination of computer expertise and investment acumen. Plus, he’s sensibly maintained what was working and adjusted what wasn’t.”

“Clearly, portfolio manager Orosco has been the driving force since his arrival nearly five years ago,” Morningstar analyst Todd Trubey says. “Long-term, it’s a great choice for smaller-cap U.S. equities.”

VSEQX does a fair bit of trading, with turnover of more than 60%. You can snuff out the tax liability of the resulting capital gains by stuffing this Vanguard fund into an IRA, HSA, or another tax-advantaged account.

Want to learn more about VSEQX? Check out the Vanguard provider site.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested’s free retirement planning newsletter.

7. Vanguard International Dividend Appreciation Index Fund Admiral Shares

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• Style: Foreign large-cap dividend-growth stock
• Management: Index
• Assets under management: $8.8 billion
• Dividend yield: 2.2%
• Expense ratio: 0.16%, or $1.60 per year for every $1,000 invested

Up until now, I’ve focused exclusively on funds that invest predominantly in U.S. stocks. That’s because we (and most of you reading) live in the U.S., and typical portfolio recommendations for Americans involve owning a lot of American stocks. For good reason! U.S. markets have long been among the most productive in the world, and if you believe in the American economy’s ability to keep growing, that should remain the case.

But most experts would tell you that it’s worth having at least some international exposure, and years like 2025 (in which international equities outperformed American stocks). One way to do that is through the Vanguard International Dividend Appreciation Index Fund Admiral Shares (VIAAX).

Vanguard International Dividend Appreciation Index has a similar thrust to Vanguard Dividend Growth in that it’s interested in owning high-quality companies, which it does by identifying and holding companies with a history of increasing their dividends. VIAAX tracks the S&P Global Ex-U.S. Dividend Growers Index, which consists of international firms that have improved their payouts on an annual basis for at least seven consecutive years. As an additional quality screen, the index excludes the 25% highest-yielding eligible companies from the index. Without getting too far into the weeds, high dividends can sometimes be the result of significant price drops and in some cases might not be sustainable.

VIAAX is most heavily invested in developed European and Asian markets such as Japan, Switzerland, and the U.K., though it also has a high concentration in Canadian stocks, as well as some exposure to emerging markets such as India and China. But many of its roughly 330 holdings will be plenty familiar to Americans—it’s loaded with blue-chip multinational firms like Swiss food giant Nestlé (NSRGY), France’s Schneider Electric, and Japanese tech titan Sony (SNE).

What you won’t find are real estate investment trusts (REITs). Why exclude what is typically the market’s highest-yielding sectors? One possible explanation is that most common stocks, such as those held in this Vanguard fund, pay qualified dividends, which enjoy favorable tax treatment at the long-term capital gains tax rate. Most REIT dividends, however, are non-qualified and are taxed as ordinary income at federal income tax rates. By excluding REITs, VHYAX can pay out 100% qualified dividend income, helping shareholders avoid a potential tax headache.

Yet, even without real estate, VIAAX’s yield is higher than comparable U.S. funds, which is typical for international developed-markets strategies.

You can get this Vanguard fund as an ETF, too: the Vanguard International Dividend Appreciation ETF (VIGI, 0.07%), which currently trades for around $90 per share.

Want to learn more about VIAAX? Check out the Vanguard provider site.

Related: How to Choose a Financial Advisor

8. Vanguard Intermediate-Term Corporate Bond Index Fund Admiral Shares

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• Style: Intermediate-term corporate bond
• Management: Index
• Assets under management: $66.0 billion
• SEC yield: 5.1%*
• Expense ratio: 0.06%, or 60¢ per year for every $1,000 invested

Most investors will want some exposure to bonds—debt issued by governments, companies, and other entities that pay interest to bondholders. But how much will largely depend on your age.

Bonds tend to be much less volatile than stocks, for better or worse; it limits downside, yes, but it also limits upside. Instead, most of the return from bonds comes from the steady stream of interest income they produce. They’re not great for generating wealth, which is your prime concern when you’re younger, but they’re outstanding for protecting wealth, which becomes increasingly pivotal as you age.

But it’s tough to go out and buy a single bond. Data and research on individual issues is much thinner than it is for publicly traded stocks, plus, some bonds have minimum investments in the tens of thousands of dollars. So, your best (and most economical) bet is to buy a bond fund, which can provide you with access to hundreds if not thousands of bonds.

For instance, the Vanguard Intermediate-Term Corporate Bond Index Fund Admiral Shares (VICSX) allows you to invest in almost 2,300 investment-grade corporate bonds with maturities of between five and 10 years. 

Investment-grade corporates are a little riskier than similar-maturity Treasuries, but you get a bit more yield as a result … and they’re not exactly poor-quality bonds. VICSX’s portfolio is split roughly 50/50 between BBB-rated bonds (the lowest investment-grade rating) and A-rated or above. Meanwhile, the focus on intermediates provides a fair blend of risk and income.

Duration (a measure of interest-rate risk) is 6.0 years, which implies that a 1-percentage-point increase in market interest rates would lead to a 6.0% short-term decline in the fund, and vice versa. And we’re getting a nice 5%-plus in yield in return.

VICSX’s ETF version is the Vanguard Intermediate-Term Corporate Bond ETF (VCIT, 0.03% expense ratio), which goes for about $85 per share.

* SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

Want to learn more about VICSX? Check out the Vanguard provider site.

Related: 9 Best Fidelity ETFs for 2026 [Invest Tactically]

9. Vanguard Short-Term Treasury Index Fund Admiral Shares

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• Style: Short-term U.S. Treasury bond
• Management: Index
• Assets under management: $33.4 billion
• SEC yield: 3.8%
• Expense ratio: 0.06%, or 60¢ per year for every $1,000 invested

Investors who want to significantly reduce risk might prefer the Vanguard Short-Term Treasury Index Fund Admiral Shares (VSBSX), which focuses on a subset of bonds that have very low risk for two reasons: they have short maturities, and they’re issued by the U.S. Treasury.

Maturity helps determine risk. Generally speaking, the longer the bond, the greater the risk that the bond might not be repaid. Interest rates come into play, too. When rates go higher, new bonds pay more, which tempt people to sell their old bonds for the new, higher-paying bonds. But the temptation is much greater when you’re dealing with longer-term bonds with lots of payments remaining—and not so great for short-term bonds with one or just a couple payments left.

Meanwhile, U.S. Treasury bonds, which are backed by the full faith and credit of the U.S. government, are some of the highest-rated bonds on the planet. Is there 100% certainty they’ll be repaid? No. But is there a higher likelihood of repayment than the vast majority of issuers out there? You betcha.

Vanguard Short-Term Treasury Index Fund invests in more than 90 Treasury bond issues with maturities of between one and three years. And the lower risk is reflected in the averaged duration, which currently sits at just 1.9 years—thus, a 1-percentage-point hike in interest rates would knock VSBSX just 1.9% lower, versus a roughly 6% hit for the corporate bond fund VICSX. The flip side? VSBSX wouldn’t rise as much if interest rates declined.

That’s OK, as long as you know what you’re buying. If all you want is portfolio protection that can still generate some yield (at nearly 4% currently), VSBSX is one of the best Vanguard mutual funds you can buy. Or, if you prefer ETFs, you can purchase the Vanguard Short-Term Treasury ETF (VGSH, 0.03%), which goes for roughly $60 per share.

Want to learn more about VSBSX? Check out the Vanguard provider site.

Related: The 12 Best Vanguard ETFs for 2026 [Build a Low-Cost Portfolio]

10. Vanguard Wellington Fund Investor Shares

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• Style: Moderate allocation
• Management: Active
• Assets under management: $114.2 billion
• Dividend yield: 2.1%
• Expense ratio: 0.24%, or $2.40 per year for every $1,000 invested

Vanguard Wellington Fund Investor Shares (VWELX) is Vanguard’s oldest mutual fund—a “balanced” or “allocation” product (read: stocks and bonds) that has been around since 1929. It’s managed by Wellington Management, an investment management company with nearly a century of operational experience.

Wellington, which is considered a moderate allocation fund, invests about two-thirds of assets in stocks, and the other third in bonds. The stock portion of the portfolio currently holds about 80 predominantly large-cap stocks with a median market cap of around $500 billion. It’s a “who’s who” of blue chips such as Microsoft, Apple, Amazon (AMZN), and Wells Fargo (WFC). It also includes a little exposure to international stocks—predominantly developed-country names like UBS Group (UBS) and British American Tobacco (BTI).

The bond portfolio is much more broadly diversified, at more than 1,500 investment-grade issues. The majority of that (roughly two-thirds) is invested in corporate bonds, with another 25% in Treasuries and agency bonds, and the rest peppered across mortgage-backed securities (MBSes), foreign sovereign bonds, and other debt.

Put more succinctly: Wellington is a one-stop shop for your core large-cap stock and bond needs, and its 0.24% in annual expenses is very inexpensive for the skilled management and strong performance track record you’re getting in return. Just make sure you’re considering your own investment needs with this fund—if you don’t want a third of your portfolio to be in bonds, you’ll want to put additional money into individual stocks, equity funds, and/or alternative investments.

Wellington has a fair bit of turnover (62%) and generates a decent chunk of interest income from its bond portfolio. So, if you’re going to invest in VWELX, it makes sense to do so in a tax-advantaged account.

Want to learn more about VWELX? Check out the Vanguard provider site.

Related: 10 Monthly Dividend Stocks for Frequent, Regular Income

11. Vanguard Wellesley Income Fund Investor Shares

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• Style: Moderately conservative allocation
• Management: Active
• Assets under management: $47.4 billion
• SEC yield: 3.7%*
• Expense ratio: 0.22%, or $2.20 per year for every $1,000 invested

Another term for Wellington is a “portfolio in a can.” You see, because it holds most of what you’d want in an investment portfolio—mostly U.S. stocks and bonds, with a little international exposure—you theoretically could invest your entire nest egg in the fund and call it a day.

However, what if you wanted a portfolio in a can like Wellington but thought that its 66/33 stock-bond split was just too aggressive?

Enter Vanguard Wellesley Income Fund Investor Shares (VWINX), a “moderately conservative” allocation fund that’s much more defensively positioned. Here, bonds make up more than 60% of the portfolio. VWINX holds about 1,350 bonds—primarily corporate debt, but also Treasury and agency bonds, and even sprinklings of foreign debt and MBSes. The remaining equity portion is spread across 75 stocks or so, with a distinct value tilt and with a little exposure to developed international markets.

VWINX performance has been mixed in nearer-term time frames, but its long-term track record is excellent. The fund’s trailing 15-year return is ahead of 80% of its peers.

“Vanguard Wellesley Income’s experienced managers wield a proven process rooted in fundamental research,” says Morningstar Analyst Stephen Margaria. “Paired with low fees, this fund is an excellent choice for investors seeking an income-focused allocation fund.”

* SEC yield is used instead of dividend yield here because of the fund’s bond-heavy allocation.

Want to learn more about VWINX? Check out the Vanguard provider site.

Related: 15 Best Long-Term Stocks to Buy and Hold Forever

Learn More About These and Other Funds With Morningstar Investor

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Vanguard Funds: Frequently Asked Questions (FAQs)

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What is the minimum investment amount on Vanguard mutual funds?

Vanguard funds are known for being shareholder-friendly. The Vanguard mutual fund company blazed new trails with the index fund, and Vanguard has done more than any other investment firm to keep costs to a minimum for investors.

But there is one hitch. Many of Vanguard’s cheapest funds in terms of fees have initial investment minimums of around $3,000.

If that is a problem for you, don’t sweat it. Most popular Vanguard index funds are also available as ETFs. Most self-directed HSAs will allow you to buy as little as one share, and some even allow for fractional shares. And if you use a commission-free brokerage, you can buy those ETFs without incurring additional fees. ETF prices vary, of course, but many cost less than $100, and they rarely exceed $400 per share.