Top 5 Vanguard UK Funds That Will Make You Millions (2023)

Introduction

Here are my Top 5 Vanguard UK Index funds/ ETFs that I think are some of the best available to UK Investors. Everything from the S&P 500 (VUSA) to the FTSE ALL world ETF (VWRL) and everything in between like the FTSE 250 and emerging markets. I look at some high-level details and explain why I like each one, as well as a little fun fact at the end showing you how long you'd need to invest to become a millionaire with a reasonable rate of return. Let me know if you prefer any others or would choose another option?

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Content

Here's my top five vanguard funds, I think, are possibly the best you can invest in from here in the uk.

As you know, there are thousands of different options out there.

Individual companies etfs mutual funds- reits, you name it so to make your life a lot easier.

I've put together five of my favorites, some of which I've invested my own hard-earned money into so without further ado.

Let's kick off, and this is in no particular order, so sit back, relax and enjoy first up it's one of the most popular funds vanguard offers, as well as being one of the most famous stock market indices in the world.

This etf tracks, the s p 500, some of the greatest and most powerful companies, headquartered in the us, many of whom dominate their fields and do business all over the world from a high level.

We'll see that this tracks, 508 different companies, has a super low, ongoing fee of 0.07 and also has over 30 billion dollars worth of investors.

Money poured into it.

Put this into perspective.

If you were to invest a thousand pounds into this fund, your charges would be 70 per year.

I don't think you can even buy coffee for that.

These days will get much else.

Obviously this doesn't factor in any other fees, for your platform, etc.

But if you buy somewhere like trading 212 or invest engine, you could avoid platform fees altogether, so go check them out after this video, this fund is passively managed.

Remember, which means that there are no fund managers trying to pick the stocks in the portfolio they literally just copy and paste all of those companies in the index and allocate the funds depending on their market weight.

The larger the company, the more the fund buys you'll, see this here.

If we go to the portfolio data section scroll down, the top companies are the largest in the index and at the top of course, you've got apple, microsoft, amazon and alphabet, and so on apple will have the largest share of this fund's money at 6.91.

Currently, if apple suddenly becomes worth less than microsoft, then the fun would be adjusted and so on.

Why is this a good option? Who might this one be for well this one's universal? In my opinion, you won't go far wrong having ownership in this fund, regardless of whether you live in the uk or anywhere else in the world.

This index has proven itself time and time again to deliver great results.

It's got a wide, diverse range of companies, many of whom are leaders in their space, and it makes up a large amount of the investable world in the us.

I'll put a firm bet that, whether you know it or not, your current pension pot or other investments have probably made their way into this index.

Somehow, oh and one final thing, although you'll probably want this fund to help, you grow your wealth.

This one does currently pay a dividend as well, currently 1.16.

So if you end up with say, 10 000 pounds in this one you'll make around 116 pounds per year sounds good to me, but why not just keep reinvesting it sticking with the us for the time being.

This next fund is a giant for a couple of reasons.

This fund invests in the entire u.s stock market, rather than just the top 500 companies that we just looked at before, which means this also includes a lot more of the smaller and more dynamic companies in the us that have the ability to grow really really quickly from a high level.

You can see that this fund tracks 4 074 stocks, has an ongoing charge of 0.1 percent per year and has 1.3 billion pounds invested inside it.

What I really like about this is it reflects one of vanguard's founder john bogle's key principles in that you should just own the whole market.

He used to say that, rather than trying to find a needle in the haystack like buying amazon, when it was a much smaller company, just buy the whole haystack and this fund is about as close as you can get to owning the haystack and the entire barn to put all of it in in the us.

They've got a similar fund, which you may have come across if you've watched a lot of finance, youtube content from american creators and that's the famous vti etf.

This comes about as close as you can get to this one, but allows us poor uk folk to get invested instead.

Why is this one? A good option, who's it for well very much like the s p 500.

This one is another universal one.

In my opinion, you get exposure to virtually every single public us company from huge to small, and this means that you benefit from the growth in the economy as well as ensuring that you also get your fair share of games when some of the smaller companies rise through the ranks as well.

If you look back at the history of the stock market, indexes you'll see that smaller companies have tended to do better over the long run, but they can be pretty volatile too when compared to their larger brothers or sisters so having the best of both worlds with big and small companies gives you a great balance up.

Next, let's talk about something a bit closer to home, the good old trusty footsie 250.

Now I could have easily gone for something like the ftse 100, but I wanted to throw in a little bit of a curveball and I'll explain all of my reasons for this in a moment, at a high level, this fund has 251 stocks, an ongoing cost of 0.1 and contains almost 2 billion pounds worth of investors fund.

Remember that in the naming convention the ftse 250 is not the ftse 100 and then the next 150.

It's actually the 250 companies after the ftse 100.

So technically it doesn't contain any of the ftse 100 companies inside of it, and I think it's a good thing.

But let me explain why the ftse 250, by its nature, contains lots of much smaller companies which, as we discussed earlier, have the ability to grow faster and perform better than the wider stock market.

There's amazing innovative companies on the list that can grow their business, 20, 30 or even 40 percent per year when compared to some of the larger companies on the ftse 100, and it makes those big companies look like slow-moving oil tankers, which is ironic because some of the ftse 100 companies are, of course oil companies.

Just like the previous fund.

This one is also passive.

There are no active managers and to show you the kind of companies that are also included in the fund.

Let's take a look at who makes up that list at the top you'll notice that there's a lot more of an even spread.

Not a single company makes up more than 1.5 percent of the fund's value at the top.

Here you have companies and household names like centrica, easyjet, direct line and so on, and this is important to me because it shows that you aren't just relying on one or two big names in this space to carry the weight of the index and your funds are put to work a lot more evenly.

Just compare this to say the s p 500 index we spoke about earlier and you'll see a huge difference.

Why is this a good option? Who's it for? Firstly, I think it's good to have some exposure to smaller companies, which is useful for any investor looking to find growth, and, secondly, I think it's good not to ignore companies which could be on our home soil that might be unloved and undervalued in the market, which is potentially what's happening here in the uk, with the current state of affairs, everyone's focusing on big tech and u.s companies, while the uk based firms get left behind, but their time will come, I'm sure of it now we're going to spread our horizons a little bit wider with this one- and this is one I own myself alongside the s p 500 in my current vanguard stocks and shares isa, the ftse emerging markets etf, which can be found through the ticker symbol of vfem at high level.

It contains 1873 stocks, has an ongoing charge of 0.22 and has 2.3 billion dollars worth of assets included within it.

Emerging markets have always been a favorite place for the more adventurous investors to seek their fortunes, because there are a huge number of amazing companies out there in smaller economies that have the chance to grow massively over the coming years and can easily beat more developed indices like the uk or the us also.

Don't think that you're investing in just small countries or those are still very much trying to get themselves going.

We're also talking about some big beasts here as well.

China and taiwan both feature on the emerging markets list, even though arguably the country's economy and gdp is on the rise and it makes them a big part of the global economy.

If you take a look at some of the companies on this list, you'll also notice some huge giants, many of whom are based in china and taiwan like alibaba, tsmc and jd.com, who all do huge amounts of business and have found themselves recently beaten up in share price over the last year or so as various fears in the market.

Of course, investor sentiments change.

I've personally allocated around 15 of my iso into the emerging markets fund.

As in the long term, I think there are huge opportunities here, even if, in the short term anything could happen and they've still been taking a little bit of a hit.

Why is this a good one and who's it? For then, anyone who wants to place a bet on emerging economies, potentially outgrowing and outpacing, the big boys in the us and europe might want to have a look here and also those who don't want to overweight themselves too much by putting all of their eggs just in the u.s market.

It's easily done, if you end up with, say the s p, 500 fund, some life strategy and even a global index fund before you know it you're, 80 u.s and while that's fine, none of us know the future, so diversification could be a good option and this expands our horizons beyond just our own borders.

Okay, finally, and certainly not last in terms of the power of this one, enter from stage left one of the best investing funds you can get.

In my humble opinion, the vanguard, ftse all world use its etf trading as vwrl.

It's one of the best funds.

You can invest in because, quite simply, it's got everything inside it.

As the name suggests.

This fund invests in virtually the entire world, from very small companies to the really really big ones and from the us all the way through to emerging markets at a high level, it's got 3793 stocks inside of it ongoing charges of 0.22 and a whopping 8.7 billion dollars worth of investors.

Funds inside it.

This one is super popular for very good reasons.

If you look inside the fund, you won't be surprised to see some of the most famous companies in the world because, just like other funds we've spoken about, this is passive and index link.

So it's allocating its fund again based on the way or the size of the company.

Therefore, if we have a look here, we'll see that the largest names in the fund pretty much match the s p 500.

However, you do start finding a few other names here, like tsmc.

You find their way onto that list and also, if you flick over the page, you also get the chinese company 10 making up 0.49.

Why is this good and who's it? For well, quite simply, if you want to invest in a single fund without having to ever worry about how much to invest in the us, the uk or elsewhere, this could be the one you pretty much own the world, which is a popular investing strategy, and it takes john bogle's philosophy to the next level of literally owning the entire haystack.

Without leaving a single thing out, as the world economy grows, your wealth will grow with it and, although there'll always be some bad times along the way, recessions and corrections on the whole, the market is getting larger.

Companies are becoming more profitable and by investing more you get to have make sure you get your fair share of all of that growth.

I wasn't too interested in the stock market.

I didn't feel comfortable building my own portfolio.

I can easily see myself just investing this one and sticking with it over the years.

Oh and remember, I did say that these funds could make you millions if you get an 8 rate of return and invest 500 pounds every month.

You'll need to do this for 34 years and you'll see your account value tick over that magical million mark now, if only we all started doing this in our 20s we'd, be a lot better off.

Remember that it's up to you to work out where to invest your money, I'm not a professional financial advisor and I've got no idea where the growth will come from over the next few decades.

So how you end up? Choosing your funds or shares is down to you off of the list we've just spoken about.

I do currently own the s, p, 500 and the emerging markets, but I think at some point I'm going to add some ftse 250 and if I do I'll make sure to let you know in my next vanguard portfolio update, I really hope you've enjoyed the video if you are interested in the whole fund offering from vanguard.

I've recently done a complete guide that walks you through all of them explaining what some of the complex terminology means and also looking at some of the more interesting funds like the life strategy and target retirement too.

So I'll leave this one up on screen now for you to watch after this one do drop me a like if you've enjoyed it subscribe for more and as always, happy investing.