5 Best Highest Performing Vanguard Funds: Warren Buffett, one of the greatest investors of our time, has often emphasized a long-term investment philosophy, famously stating, “Our favorite holding period is forever.” He advocates a patient, owner-centric approach to investing that focuses on buying undervalued, high-quality companies and holding them for long periods.
5 Best Highest Performing Vanguard Funds
However, this strategy is facilitated by Buffett’s access to vast resources, deep market knowledge, and a high-risk appetite that allows him to maintain significant stakes in companies through periods of volatility.
However, it can be challenging for the average retail investor to strictly adhere to Buffett’s model of holding a concentrated portfolio indefinitely. Having conviction in a company and being willing to keep it forever doesn’t always translate into market-beating returns over the long term.
Historical examples such as General Electric Co (ticker: GE) and International Business Machines Corp (IBM) illustrate the risks of such an approach, with shareholders of these once-dominant companies experiencing long-term total returns that have lagged the S&P 500 from 1986 to the present.
The key to mitigating these risks is diversification. By spreading investments across various stocks from different sectors and even countries, investors can buffer against individual losses, allowing the better-performing assets to compensate over time.
For those looking to implement a diversified, long-term investment strategy quickly, Vanguard funds offer an ideal and accessible solution.
Vanguard offers a wide range of options, with 86 exchange-traded funds (ETFs) and 267 mutual funds covering a broad range of stocks and bonds to suit investors with different time horizons, risk tolerances, and investment objectives.
In addition, Vanguard’s unique shareholder-owned structure ensures that low fees are a hallmark of its fund lineup, enhancing the long-term value proposition for buy-and-hold investors.
Very few, if any, investors should be paying 1% a year for investment advice and portfolio management, says Jordan Taylor, an independent financial adviser at Core Planning. “Vanguard does a great job of trying to provide as many low-cost investment options as possible, something that many asset management firms fail to do.
Here are Five of Vanguard’s best buy-and-hold funds
| Fund | Expense Ratio |
|---|---|
| Vanguard S&P 500 ETF (VOO) | 0.03% |
| Vanguard Total Stock Market ETF (VTI) | 0.03% |
| Vanguard Dividend Appreciation ETF (VIG) | 0.06% |
| Vanguard Value ETF (VTV) | 0.04% |
| Vanguard Total World Stock Index Fund Admiral Shares (VTWAX) | 0.10% |
| Vanguard Wellington Fund Investor Shares (VWELX) | 0.25% |
| Vanguard Target Retirement 2065 Fund (VLXVX) | 0.08% |