3 Vanguard ETFs That Could See Massive Inflows In the Next Year

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Vanguard is among the top exchange traded fund (ETF) providers, and actually was a pioneer of this industry. Indeed, the fact that ETFs probably wouldn’t exist if not for Vanguard is a fact that many investors may not necessarily be aware of, but it’s something I think about when considering which ETFs to invest in over time. 

The longevity many Vanguard ETFs display allows investors to have a much clearer picture of the long-term potential upside of holding such funds within their portfolios. And the experience with which Vanguard ETF fund managers operate provides many investors with a degree of calm that’s needed when one looks to invest for the long-haul.

Over the course of the next year, there are a number of top funds I think could provide massive upside potential for investors. Here are three Vanguard ETFs that are atop my watch list in this regard right now. 

Vanguard Total World Stock ETF (VT)

The reality is that we’re shifting more toward a world in which investors are thinking more globally than ever. Some of this shift has to do with the recently-imposed tariff policy from the U.S., which some investors believe (probably with good reason) could lead to higher inflation and slower growth over time. 

Thus, for investors looking outside the U.S. and who want to own the global basket of stocks, the Vanguard Total World Stock ETF (VT) is an excellent option to consider. This ETF holds a mix of U.S. and international stocks, seeking to truly “own the world” so to speak in what’s become a trade-driven global economy. 

I think investors will continue to think about where to invest, as much as which sectors or specific companies could have the upper hand, over the next year and beyond. If that’s the case, this ETF with an expense ratio of just 0.06% and a dividend yield of 1.8% (which is higher than the S&P 500) is certainly worth a look. 

Vanguard FTSE Developed Markets ETF (VEA)

Sticking with this theme for a minute around international stocks, I think Vanguard FTSE Developed Markets ETF (VEA) is another great option for investors to consider. This fund specifically invests in companies outside of the U.S. and Canada, meaning investors with outsized exposure to North American markets can further diversify their holdings toward the international arena.

The thesis behind holding this ETF over VT really comes down to how much international exposure investors want right now. For those holding other U.S. or Canada-focused ETFs, picking VEA over VT may be the better choice from a diversification standpoint. Indeed, from a dividend perspective (current yield of around 2.8%) and an expense ratio perspective (currently just 3 basis points or 0.03% of cost to hold this fund), there’s a lot to like about how this ETF may perform over the coming year.

It’s my view that international stocks could continue their streak of outperformance, given how global stocks (ex.-U.S.) are valued relative to American companies. If that’s the case, this is a top ETF investors may want to buy now and hold for at least the next 12 months. 

Vanguard Total Bond Market ETF (BND)

For those investors who are naturally more conservative, who don’t have enough fixed income exposure, or are nearing retirement and looking for portfolio stability over absolute returns, adding some fixed income exposure is never a bad idea.

The Vanguard Total Bond Market ETF (BND) is among the best options to consider in this space, in my view. As its name suggests, this fund invests in a range of bonds and other income-producing assets. With a focus on U.S. investment-grade debt, investors gain exposure to claims on various companies’ future debt payments, something that may be more compelling to investors who are worried about volatility impacting the stock market in the near-term, or yields declining over time.

As yields come down (if the Federal Reserve does indeed continue its interest rate cutting regime), bond prices rise. Thus, in recessionary times when the Fed tends to cut rates to zero (as stocks plummet), bonds tend to outperform. Accordingly, this ETF provides the kind of portfolio security many investors are looking for, at an expense ratio of just 0.03%. And with a current yield of 3.75%, investors aren’t giving much up with respect to holding Treasury bonds on their own.

This is a better, more diversified, option for investors in this camp in my view. 

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