For most of the 20th century, active trading — where fund managers try to beat the market's returns — held sway. In 1976, Vanguard founder John Bogle introduced the first publicly available index fund, forever changing the way we invest.
Index funds, which seek to simply match the rise and fall of the broader market, have proved more popular and profitable for the average investor for two reasons: markets tend to rise over time, and index funds charge lower fees, allowing investors to keep more of their money in the market.
When it comes to investing in index funds, many turn to Vanguard, which manages $12 trillion in assets.
What is a Vanguard index fund?
As total stock market values tend to rise over time, index funds harness this trend by capturing entire market gains for investors rather than actively investing in individual stocks. Vanguard index funds track the performance of a single market index — such as the S&P 500 or Nasdaq — to mirror its total market returns.
Vanguard creates index funds by buying securities that represent companies across an entire stock index or that are targeted to specific groups (e.g., an industry sector, similarly sized companies, or firms in the same part of the world). Individual investors purchase shares of the fund that interests them, claiming a slice of its returns.
Vanguard also offers index funds that mirror the bond markets. These funds buy and sell government and corporate debt and are considered safer investments, but they typically have smaller returns.
» Need to back up? See how to invest in index funds for beginners
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What are the best Vanguard index funds?
Vanguard offers many index funds to choose from. Which fund is best for you depends on your portfolio mix and what you can afford, given account minimums and fees. You can also check the fund’s historical performance — with the standard caveat that past performance does not guarantee future results.
Vanguard 500 Index Fund (VFIAX)
Expense ratio: 0.04%
Also known as the Vanguard S&P 500 Index Fund, this is the one that started them all, giving investors exposure to 500 of the largest U.S. companies, which make up approximately 80% of the U.S. stock market’s total value.
Vanguard Morningstar Total Stock Market Index Fund (VTSAX)
Expense ratio: 0.04%
If over three-quarters of the U.S. stock market is not enough for you, VTSAX gives you even more. This fund covers the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks.
Vanguard Morningstar Growth Index Fund (VIGAX)
Expense ratio: 0.05%
This fund takes a buy-and-hold approach to stocks in large U.S. companies in sectors with higher growth potential, such as technology, consumer services and financial services.
Vanguard Morningstar Small Cap Index Fund (VSMAX)
Expense ratio: 0.05%
Big companies aren’t the only potentially profitable players in the stock market. This fund targets smaller publicly held companies for investors seeking to diversify away from larger public companies.
Vanguard Total Bond Market Index Fund (VBTLX)
Expense ratio: 0.04%
This fund provides broad exposure to U.S. investment-grade bonds, allocating about 30% to corporate bonds and 70% to U.S. government bonds.
Vanguard Balanced Index Fund (VBIAX)
Expense ratio: 0.07%
As the name suggests, this fund allocates its investments between stocks (roughly 60%) and bonds (about 40%) to balance growth through equity exposure with stability from fixed-income investments.
Vanguard Total International Stock Index Fund (VTIAX)
Expense ratio: 0.09%
For investors interested in exposure beyond the U.S. market, this fund tracks stock indexes in both developed and emerging markets worldwide.
Source: Vanguard. Data is current as of July 31, 2026, and is intended for informational purposes only, not for trading purposes.
In the news: You may have noticed that some of the funds above are now called "Vanguard Morningstar" funds, not just "Vanguard" funds. And that's simply because the indexes that these funds are based on — the CRSP Market Indexes — were purchased by Morningstar in early 2026. Nothing about these funds will change other than their name — per Vanguard, the objective and management will remain the same.
How much do Vanguard index funds cost?
Generally, you make an initial minimum investment (typically $3,000) and pay annual costs (known as an expense ratio) to maintain the fund based on a small percentage of your cash invested in the fund.
Most Vanguard index funds, including the ones in the list above, are what's called "Admiral Shares class." Vanguard also offers an Investor Shares class of funds to individual investors, but this has largely been phased out.
So what's the difference? Well, for funds that are still in Investor Shares, the minimum investment is the same as the Admiral Shares minimum — usually $3,000 — but expense ratios tend to be higher.
Vanguard closing off widespread access to Investor Shares isn't a bad thing — lower fees will save investors money over time. And Vanguard's expense ratios are among the lowest out there. In early 2026, the provider cut costs even further, reducing expense ratios for 84 of its mutual funds and ETFs.
However, if any of the funds above have a steeper minimum investment than you can meet right now, consider the ETF version instead. You can buy ETFs as whole or fractional shares through Vanguard, starting at $1, and they can be bought and sold throughout the day like stocks. They're also usually more tax-efficient than index funds.
Keep in mind that buying a Vanguard mutual fund through another broker may come with a transaction fee, while ETF fees vary by broker, though most offer commission-free ETF trades.
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Are Vanguard index funds a good investment?
All investments carry risk, and Vanguard index funds are no exception. But Vanguard has a long history of strong performance — and passively investing in index funds is so popular because most actively managed funds fail to consistently outperform the market.
As with all mutual funds, a key benefit of Vanguard index funds is instant diversification, spreading risk and dampening volatility, since broader stock market swings are less pronounced than the rise and fall of any one company's shares.
How to purchase Vanguard index funds
If you're ready to purchase Vanguard index funds, our Vanguard brokerage review can help you decide whether to buy directly from the company or through another broker (many of which also sell Vanguard index funds). You’ll need to choose the type of account you’d like to open, such as a traditional or Roth IRA, or a taxable account.
Finally, decide which index fund shares you’d like to purchase depending on how much you have to invest, and whether to make monthly additional share purchases in the fund.
» Interested in buying Vanguard funds from a different broker? See our picks for the best brokers for funds
Neither the author nor editor held positions in the aforementioned investments at the time of publication.
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- 1.Vanguard. About Vanguard. Accessed Jul 31, 2026.
- 2.Morningstar. Morningstar Completes Acquisition of CRSP and Extends Relationship with Vanguard.
- 3.Vanguard. Vanguard to Update Names of U.S. Equity Index Funds Tracking Morningstar Indexes. Accessed Jul 31, 2026.
- 4.Vanguard. Your power move? Choosing low costs and consistency.
