These three affordable funds offer a chance to invest in international dividends, U.S. technology, and small-cap value—essential parts of a well-rounded portfolio.
Honestly, I tend to lean towards writing about growth stocks that are pretty high-risk but have high returns. However, the truth is, most of my investments are in more stable Vanguard exchange-traded funds (ETFs).
Vanguard is known for being the preferred ETF option among many investors, largely because of its unique structure. Essentially, it operates on a cross-ownership model where the fund’s shareholders are also the owners of Vanguard itself.
Without outside shareholders demanding profit, Vanguard keeps costs low and passes those savings directly to investors. This leads to an average expense ratio of just 0.07%, in contrast to the industry average of over 0.40%. Over the long haul, that difference can put a significant amount of money back in your pocket.
Moreover, Vanguard boasts an impressive range of passively managed index funds that touch on everything from broad market exposure to specific international markets and niche sectors. It’s no wonder the company manages more than $8 trillion in assets.
Here are three Vanguard ETFs that I think are worth considering right now.
1. Global Dividends
Vanguard International High Dividend Yield ETF targets high-yield stocks in both developed and emerging markets outside the U.S. This fund focuses on companies expected to pay higher-than-average dividends in the next year, leaning toward sectors like financials, consumer staples, and energy.
The Vanguard International High Dividend Yield ETF charges an expense ratio of 0.17% and has a 30-day SEC yield of about 4%. For those looking for income, it provides big yields that are hard to find in the U.S. market, all without needing to dive into riskier investments. With over 1,500 holdings across Europe, Asia, and emerging markets, it offers vital geographic diversity, especially since U.S. stocks tend to dominate our portfolios.
2. The Quiet AI Fund
Vanguard Information Technology ETF has emerged as a solid option to capitalize on the artificial intelligence (AI) trend without the need for individual stock selection. Its top three holdings—Nvidia, Apple, and Microsoft—make up about 45% of its assets, reflecting the major players in AI infrastructure.
This ETF has an annual fee of just 0.09% with a 30-day SEC yield of 0.42%. It includes over 300 companies from sectors like semiconductors, software, and IT services, encapsulating both the larger companies driving AI growth and the smaller innovators potentially benefiting from it. If you believe in tech’s power to reshape the economy, this fund offers focused exposure at a fraction of what typical actively managed tech funds charge.
3. Small-Cap Strength
Vanguard Small Cap Value ETF occupies a space quite different from large-cap tech, which is significant. This fund invests in smaller U.S. companies that are undervalued—often overlooked by institutional investors—but have shown solid long-term performance.
With an expense ratio of only 0.07% and a 30-day SEC yield of 2.03%, the Vanguard Small Cap Value ETF features over 800 stocks, ensuring that no single stock comprises more than 1% of the total assets, which provides robust diversification within small-cap value stocks.
Its top sectors include finance and industrials, which are more sensitive to economic changes and perform well when the economy picks up. After lagging behind large-cap growth stocks for a while, small-cap stocks might be due for a comeback.
Wrapping Up
These funds may not spark lively conversation at a cocktail party, but together they provide a mix of international income, U.S. growth, and contrarian value—three distinct revenue sources that work well across different market conditions. Add in Vanguard’s cost advantages, and you’ve got a solid path for building wealth that’s tough to beat.
Sometimes a bit of monotony is just what your portfolio needs.
