Vanguard ETFs, Mutual Funds & Model Portfolios: Best Investments for 2025

When it comes to investing, few names are as trusted as Vanguard. Founded by John Bogle — the pioneer of index investing — Vanguard has become the world’s second-largest asset manager with more than $8 trillion in assets under management (AUM). Its low-cost ETFs, mutual funds, and model portfolios have consistently helped investors achieve long-term wealth growth.

As we move into 2025, investors are asking: What are the best Vanguard funds and portfolios for maximizing returns while keeping costs low? This guide explores Vanguard ETFs, mutual funds, and model portfolios that stand out in 2025.

Why Vanguard?

Before diving into specific investments, here’s why Vanguard remains a top choice in 2025:

·         Low Costs → Vanguard’s average expense ratio is just 0.08%, compared to the industry average of 0.47%.

·         Diversification → Access to broad index funds, sector ETFs, and global portfolios.

·         Long-Term Focus → Designed for retirement accounts, wealth building, and financial independence.

·         Investor-Owned Structure → Unlike most asset managers, Vanguard is owned by its investors, not shareholders.

Best Vanguard ETFs in 2025

ETFs remain the most cost-efficient and tax-friendly way to invest with Vanguard. Here are the top-performing and most reliable options:

1. Vanguard S&P 500 ETF (VOO)

·         Expense Ratio: 0.03%

·         Why Invest? Tracks the 500 largest U.S. companies, offering instant diversification across sectors like tech, healthcare, and finance.

·         Best For: Long-term wealth builders who want exposure to U.S. large-cap stocks.

2. Vanguard Total Stock Market ETF (VTI)

·         Expense Ratio: 0.03%

·         Why Invest? Covers all U.S. stocks (large, mid, small, and micro-cap). More diversified than the S&P 500.

·         Best For: Investors who want the entire U.S. equity market in one fund.

3. Vanguard FTSE All-World ex-US ETF (VEU)

·         Expense Ratio: 0.07%

·         Why Invest? Provides exposure to international developed and emerging markets, excluding the U.S.

·         Best For: Global diversification beyond the U.S. market.

4. Vanguard Real Estate ETF (VNQ)

·         Expense Ratio: 0.12%

·         Why Invest? Invests in REITs (Real Estate Investment Trusts), providing income and inflation protection.

·         Best For: Income investors looking for dividends and real asset exposure.

5. Vanguard Total Bond Market ETF (BND)

·         Expense Ratio: 0.03%

·         Why Invest? Covers U.S. investment-grade bonds, stabilizing portfolios during volatility.

·         Best For: Conservative investors or those nearing retirement.

👉 Together, VOO/VTI + VEU + BND can create a global 3-fund portfolio that balances growth and safety.

Best Vanguard Mutual Funds in 2025

While ETFs are more popular, many long-term investors still prefer mutual funds, especially for retirement accounts and SIP-style investing.

1. Vanguard 500 Index Fund (VFIAX)

·         Expense Ratio: 0.04%

·         Why Invest? Same as VOO (S&P 500) but in mutual fund form.

·         Best For: Retirement savers who prefer auto-investing instead of intraday trading.

2. Vanguard Total Stock Market Index Fund (VTSAX)

·         Expense Ratio: 0.04%

·         Why Invest? Covers the entire U.S. stock market.

·         Best For: Long-term investors seeking simplicity and diversification.

3. Vanguard Target Retirement Funds

·         Expense Ratio: ~0.08%

·         Why Invest? Automatically adjust stock-bond allocation as you approach retirement year.

·         Best For: Hands-off investors who want “set-it-and-forget-it” investing.

4. Vanguard Wellesley Income Fund (VWINX)

·         Expense Ratio: 0.23%

·         Why Invest? Balanced conservative fund with 60% bonds and 40% dividend-paying stocks.

·         Best For: Retirees or conservative investors looking for income + stability.

5. Vanguard Growth Index Fund (VIGAX)

·         Expense Ratio: 0.04%

·         Why Invest? Focuses on large-cap growth companies like Apple, Microsoft, and Tesla.

·         Best For: Aggressive investors seeking higher returns from growth stocks.

Vanguard Model Portfolios for 2025

Vanguard also offers ready-made model portfolios — diversified mixes of ETFs or funds tailored to risk levels. These are especially useful for investors who want simplicity, balance, and automation.

1. Vanguard 3-Fund Portfolio (Simple & Classic)

·         Composition:

o    VTI (U.S. Stocks) – 50%

o    VEU (International Stocks) – 30%

o    BND (Bonds) – 20%

·         Why It Works: Provides global diversification with minimal costs.

·         Best For: Long-term investors seeking simplicity.

2. Vanguard Growth Portfolio (Aggressive)

·         Composition:

o    80% Stocks (VTI + VEU)

o    20% Bonds (BND)

·         Best For: Younger investors with higher risk tolerance.

3. Vanguard Balanced Portfolio (Moderate)

·         Composition:

o    60% Stocks (U.S. + Global)

o    40% Bonds

·         Best For: Investors seeking stability and steady returns.

4. Vanguard Conservative Income Portfolio

·         Composition:

o    30% Stocks

o    70% Bonds (BND + TIPS)

·         Best For: Retirees needing steady income with minimal risk.

5. Target Retirement Portfolios

·         Automatically adjust allocation based on retirement year.

·         Example: Target Retirement 2045 = More stocks now → More bonds later.

·         Best For: Investors who want Vanguard to manage rebalancing automatically.

ETFs vs Mutual Funds vs Model Portfolios: Which Is Best in 2025?

·         ETFs → Lowest cost, most tax-efficient, flexible for trading.

·         Mutual Funds → Ideal for retirement accounts and SIPs with auto-invest features.

·         Model Portfolios → Perfect for investors who want hands-off diversification.

👉 In 2025, the best strategy is often blending these options. For example:

·         Use VOO/VTI ETFs for U.S. equity exposure.

·         Add a Vanguard Target Retirement Fund for retirement savings.

·         Maintain a Vanguard 3-Fund Portfolio as your core wealth builder.

Final Thoughts

Vanguard remains one of the best investment platforms in 2025 for ETFs, mutual funds, and model portfolios. Its low costs, strong performance, and diversified strategies make it ideal for long-term investors seeking consistent growth.

·         If you’re cost-sensitive and DIY-oriented, choose ETFs like VTI, VOO, and BND.

·         If you want hands-off investing, go with Target Retirement Funds or Model Portfolios.

·         If you’re a retirement saver, stick with Vanguard’s index mutual funds.

 

NEXT POST>