The 3 Best Vanguard ETFs To Buy In December

Vanguard remains one of the leading providers of exchange-traded funds (ETFs) in the market. Founded in 1975 by John Bogle, who is ultimately credited with founding the exchange-traded fund (ETF). In addition to offering a range of other products and services aimed at institutional investors, one must marvel at the fundamental change that the ETF brought about for an entire generation of individual retail investors.

Vanguard Total International Stock ETF (VXUS) holds over 8,000 global stocks outside the US with an expense ratio of 0.05% and a dividend yield of 2.8%.
The Vanguard FTSE Developed Markets ETF (VEA) focuses on developed countries with an expense ratio of 0.03% and a yield of 2.8%.
Vanguard S&P 500 ETF (VOO) tracks the top 500 U.S. companies, although the top 10 now account for 40% of the index’s gains.
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Given the company’s storied track record, as well as its impressive portfolio of offerings that investors can choose from, those considering adding some passive ETF exposure to their portfolios may want to select from some of the world-class offerings that can be found on Vanguard’s platform.

In this current investing environment, I have a short list of about a dozen top Vanguard ETFs that I think long-term investors may want to consider. These are the three I would consider adding in December for those looking to put fresh capital to work.

I’m going to start with him Vanguard Total International Stock ETF (VXUS) as my top pick on this list, for one key reason. I believe that US stocks in general are overvalued, and it is simply an intriguing fact to consider that many of the major international markets offer companies that are growing at an impressive rate, but are trading at a significant relative discount. For those value-conscious investors, finding the best ETFs that provide exposure to these trends at the lowest possible cost is a great way to go.

With an expense ratio of 0.05% and a dividend yield of 2.8% (compared to a yield just above 1% for similar US ETFs), there is a lot to like about this ETF. Additionally, investors will not be exposed to some of the notable concentration risks that I will discuss later in other markets such as the United States.

With a highly diversified portfolio covering over 8,000 global stocks around the world (all based outside of the US), I think this is an ETF that could have relative growth, value, and dividend outperformance that is worth considering right now.

I will continue in the same line with this next election. He Vanguard FTSE Developed Markets ETF (VEA) is another ETF with an international focus, but with a huge objective of seeking high quality investments in developed countries. With less exposure to emerging markets, this is an ETF that investors looking for a greater concentration of quality in their portfolios can rely on.

Specific markets covered by VEA include many European markets, Japan and other major developed economies. With an even lower expense ratio of 0.03% and a similar dividend yield of 2.8%, I’d say this might be the better bet of the two.

In fact, I find the combination of higher-yield exposure to companies with excellent growth prospects and better quality metrics attractive. This is an ETF I’m personally considering for my own portfolio right now.

While having a higher concentration of international stocks is a great idea for long-term investors, it is also blatantly obvious that investors who have ignored the US market for most of the last two decades have absolutely underperformed the market.

The U.S. stock market remains the envy of the world, and that’s probably not going to change anytime soon. Consequently, I believe investors should have some exposure to blue-chip US stocks, and the Vanguard S&P 500 ETF (VOO) is among my top picks for investors looking for a low-cost way to gain exposure to top 500 companies nationally.

Now, the S&P 500 has become quite concentrated in recent years, with the top 10 companies accounting for about 40% of this index’s total gains. Consequently, there are some investors who talk about the S&P 10 versus the S&P 490 when they think about this market.

But with some of the best tech stocks in the world and covering a market with some of the best protections for capitalist investors, I think having some allocation to an ETF like VOO is a winning long-term strategy.

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