What Are the Best Vanguard ETFs for a Well-Rounded Portfolio?
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The beauty of exchange-traded funds (ETFs) is that they allow you to invest in many companies at once, viding instant diversification in many cases. Instead of picking dozens or hundreds of...
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July 2, 2025
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The Motley Fool
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The beauty of exchange-traded funds (ETFs) is that they allow you to invest in many companies at once, viding instant diversification in many cases
Instead of picking dozens or hundreds of individual stocks, you can now get a well-rounded portfolio with just a few ETFs
Four Vanguard ETFs in particular can do the trick for you: the Vanguard S&P 500 ETF (VOO 0. 44%), Vanguard Russell 2000 ETF (VTWO 1. 37%), Vanguard Mid-Cap ETF (VO 0. 37%), and Vanguard Total International Stock ETF (VXUS 0
In these four ETFs will give you exposure to companies of all sizes, industries, and geographic locations
When you're looking for a well-rounded portfolio, that's what you want
Image source: Getty Images
The Vanguard S&P 500 ETF The Vanguard S&P 500 ETF (VOO) contains around 500 of the largest American companies on the market
When you invest in VOO, you know you're getting three things: blue chip companies, a low-cost ETF, and ven results
Since debuting in September 2010, VOO's annual returns have been impressive
Every $10,000 invested then would be worth over $73,000 today when accounting for dividends (as of June 27)
By no means does this mean VOO will continue dering those same returns, but it does show its long-term potential and how lucrative an investment it has been and can be
Given the size, importance, and influence of the companies in the S&P 500, it's often considered a reflection of the U
They aren't directly tied, but as the U
Economy has grown, so has the S&P 500
That's a relationship that has consistently paid off over time
I recommend considering making VOO the bulk of your portfolio
Vanguard Russell 2000 ETF What the S&P 500 is to large companies (those with a market capitalization of over $10 billion), the Russell 2000 index is to "small" companies (those with a market cap between $250 million and $2 billion)
The small size of the companies in the Vanguard Russell 2000 ETF (VTWO) can make them more volatile, but it also gives them greater growth potential in many cases
It's a high-risk, high-reward trade-off
VTWO has often outperformed the market during periods of economic expansion, as smaller companies tend to benefit more from increased consumer and spending
You don't want to put a lot of your portfolio in small-cap stocks due to their high volatility, but that alone warrants some exposure to take advantage of these potential growth opportunities
I personally keep around 5% of my portfolio in small-cap stocks
Vanguard Mid-Cap ETF The Vanguard Mid-Cap ETF (VO) can be a nice middle ground between the S&P 500 and Russell 2000
With market caps between $2 billion and $10 billion, mid-cap companies generally have ven models and financial stability yet are small enough to be flexible and innovate quicker than many larger corporations
Some notable names in VO include DoorDash, Robinhood, Roblox, and Kroger
Mid-cap companies may not have the same resources and reach as large-cap companies, but they also don't come with as much risk as small-cap companies
It's a worthwhile trade-off, in my opinion
As with small-cap stocks, I try to keep around 5% of my portfolio in mid-cap stocks
Vanguard Total International Stock ETF Part of having a well-rounded portfolio is being invested in companies across different regions
The Vanguard Total International Stock ETF (VXUS) accomplishes this aim by containing companies from both developed and emerging around the world
Developed include countries such as the United Kingdom, Japan, Australia, and South Korea
Emerging include countries such as Mexico, Brazil, India, and South Africa
Containing over 8,500 companies in total, VXUS is the best of both worlds
On one end, you have the stability that typically comes with established
On the other end, you have the high growth potential that typically comes with emerging as they begin to expand
VXUS Dividend Yield data by YCharts
One of my favorite parts of VXUS is its dividend, with an average yield of close to 3% over the past five years
A 3% dividend yield isn't mind-blowing, but it's impressive for an 8,500-plus-stock ETF
Around 10% is a solid amount of a portfolio to be in international stocks in most cases
Stefon Walters has positions in Vanguard Index Funds-Vanguard Mid-Cap ETF, Vanguard S&P 500 ETF, and Vanguard Total International Stock ETF
The Motley Fool has positions in and recommends DoorDash, Roblox, Vanguard Index Funds-Vanguard Mid-Cap ETF, Vanguard S&P 500 ETF, and Vanguard Total International Stock ETF
The Motley Fool recommends Kroger
The Motley Fool has a disclosure policy.
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