The Final Frontier: 3 Vanguard ETFs to Power Your Portfolio into the New Year
The year is winding down, and as we turn the page to December, it is the perfect time for investors to take a good look at their core holdings. While the domestic market has delivered strong returns, driven largely by a handful of tech behemoths, diversification remains the golden rule for long-term wealth building.
For investors looking to build a fortress portfolio for the new year, Vanguard remains the undisputed leader in low-cost, high-quality exchange traded funds (ETFs). Here are three excellent Vanguard ETFs to consider buying this December, each playing a vital role in a balanced and future-proof strategy.
1. The Foundation: Vanguard S&P 500 ETF (VOO)
You simply cannot talk about a core US equity holding without mentioning the Vanguard S&P 500 ETF (VOO). This fund is the standard-bearer for tracking the 500 largest publicly traded companies in the United States, offering instant, broad exposure to the heart of the American economy.
VOO’s year-to-date return has been impressive, climbing over 17% as of late November, demonstrating the incredible power of the US large-cap market. The fund’s holdings are currently heavily concentrated in technology leaders like NVIDIA, Apple, and Microsoft, but its overall structure provides a high degree of diversification across all sectors. Better yet, its expense ratio is a rock-bottom 0.03%, making it one of the cheapest ways to access the market’s core growth.
2. The Outperformer: Vanguard Total International Stock ETF (VXUS)
If you have focused only on the US market this year, you have missed out on one of the market’s biggest stories: the return of international stocks. The Vanguard Total International Stock ETF (VXUS) has been a star performer, delivering a staggering year-to-date return of over 28% through late November, which outpaced its domestic counterpart VOO.
VXUS is a one-ticket solution for global diversification, tracking over 8,000 stocks from developed and emerging markets outside of the US. It provides crucial exposure to major international companies like Tencent, Alibaba, and Samsung. With a low expense ratio of 0.05%, VXUS is an essential purchase for investors looking to balance their US-heavy portfolios and capture future growth from overseas economies.
3. The Growth Engine: Vanguard Information Technology ETF (VGT)
For investors who want to double down on the digital revolution, the Vanguard Information Technology ETF (VGT) is the answer. This sector-specific fund offers concentrated exposure to the technology stocks driving the current market surge.
VGT is an aggressive play on US information technology, with its top holdings being the massive tech giants like NVIDIA, Apple, and Microsoft. It has delivered a strong year-to-date return of over 20% in the current climate. While it comes with a slightly higher expense ratio of 0.09% compared to VOO, it is still exceptionally low for a sector fund, making it a great way to capture high-octane growth without the risk of picking individual stocks in an expensive sector.
As you plan your final investment moves of the year, these three funds offer a simple, powerful blueprint for a globally diversified portfolio at a minimal cost. They cover the strong US core, the resurgent international markets, and the future-forward technology sector, setting you up for success in the year ahead.
