Vanguard funds can play a valuable role within an investment portfolio. Not only do they offer broad exposure to the stock market but they also have low fees.
Of course, the challenge is picking the best ones. On Vanguard’s platform, there are over 80 products to choose from. With that in mind, here are three I like for 2024.
A basic global tracker
When building an investment portfolio, it can be smart to start with a simple global tracker fund.
And one product that fits the bill here is Vanguard’s FTSE Global All Cap Index. With this fund, one gets access to over 7,000 stocks for an annual fee of just 0.23%.
I like this fund’s holdings. Currently, the top 10 positions include the likes of Apple, Amazon, and Nvidia.
I also like the fact that the fund provides exposure to large, medium, and small companies (although large companies have the biggest portfolio weights).
One issue to be aware of here is that around 60% of the fund is allocated to the US stock market at the moment.
The US market has a great track record but this does add risk. If US shares tanked, this fund would most likely underperform.
Overall though, I like this product a lot.
Exposure to China and India
If I was looking for a little more geographic diversification, however, I’d consider the Emerging Markets Stock Index Fund. This provides exposure to around 1,500 large- and mid-sized companies in emerging markets.
This product has a lot of appeal right now, in my view.
For a start, it has quite a bit of exposure to China (about 30% of the fund). And Chinese stocks are well off their highs at the moment.
Secondly, it has significant exposure to India (about 15%). And the Indian economy is booming at present.
It’s worth pointing out that this fund is higher-risk. Vanguard gives it a risk rating of 6/7 versus 5/7 for the FTSE Global All Cap Index. So, it’s probably not a good fit for risk-averse investors.
In a long-term diversified portfolio, however, I think it could complement a global tracker nicely.
Small caps for rate cuts
Another Vanguard product that I think could complement a global tracker is the Global Small-Cap Index Fund. This product – which also has a risk rating of 6/7 – provides exposure to around 4,300 smaller companies in developed markets.
I reckon this fund might outperform in 2024.
The reason I say this is that the shares of smaller companies tend to do well when interest rates are falling (because these companies are generally quite sensitive to rates).
And next year, there’s a good chance that interest rates in the US and other countries will be cut.
Of course, a major recession could throw a spanner in the works here. In this scenario, small-caps might underperform.
I think having some exposure to smaller companies is smart though. Over the long term, small-cap stocks tend to outperform large-cap shares due to their higher level of growth.
The post 3 top Vanguard funds to consider for 2024 appeared first on The Motley Fool UK.
Pound coins for sale — 51 pence?
This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
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Edward Sheldon has positions in Amazon, Apple, and Nvidia. The Motley Fool UK has recommended Amazon, Apple, and Nvidia. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
