Forbes names 16 Vanguard ETFs "all stars"
June 19, 2013
When it comes to the best bargains for long-term investors, Forbes thinks some Vanguard exchange-traded funds (ETFs) are all-stars.
In the second annual ranking of ETFs that Forbes deemed the best deals for long-term investors, Vanguard ETFs made up 16 of the 44 picks—more ETFs on the magazine's list than any other provider. The rankings appear in the June 24, 2013, issue of Forbes and are available online.
Vanguard was well represented in several equity categories and dominated the long-term bond category, taking all four spots. Vanguard ETFs also appeared in the lists for short-term and medium-term/diversified bonds.
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The Forbes calculations emphasized long-term holding costs, which weighted expense ratios more heavily than liquidity. The editors used a proprietary calculation based on expense ratios, revenue from securities-lending programs, and trading spreads to gauge the cost of investing $10,000 in each fund for ten years and picked what they considered to be the best deals for investors. As a result, the consistently low expense ratios and profitable securities-lending programs* of the chosen Vanguard ETFs helped secure their spots on this all-star list.
In fact, because of the reinvested profits from securities lending, Vanguard Small-Cap Growth ETF (VBK) and Vanguard Small-Cap ETF (VB) even showed a negative cost under the Forbes calculation, meaning that clients could be subject to fewer costs owning these ETFs than their component stocks.
"It's gratifying to see Forbes emphasizing what is a core belief here at Vanguard: that the pairing of high-quality investments and low costs is essential for maximizing the chance for investment success," said Joel Dickson of Vanguard Investment Strategy Group.
Forbes named the following Vanguard ETFs "all-stars":
- FTSE All-World ex-US (VEU)
- FTSE Developed Markets (VEA)**
- FTSE Emerging Markets (VWO)
- FTSE Europe (VGK)
- FTSE Pacific (VPL)
- Total International Stock (VXUS)
- Extended Duration Treasury (EDV)
- Long-Term Bond (BLV)
- Long-Term Corporate Bond (VCLT)
- Long-Term Government Bond (VGLT)
- Short-Term Bond (BSV)
- Total Bond Market (BND)
*Vanguard fund shareholders receive 100% of the revenue from securities lending after broker rebates, program costs, and agent fees.
**Listed as Vanguard MSCI EAFE ETF on the Forbes list, reflecting former name. Ticker (VEA) remains the same.
- Vanguard ETF Shares are not redeemable with the issuing fund other than in creation unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor will incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
- Forbes magazine is not affiliated with Vanguard or Vanguard funds. The article mentioned here is neither an offer to sell nor a solicitation of an offer to buy shares.
- Mutual funds and ETFs, like all investments, are subject to risks, including the possible loss of the money you invest.
- Investments in bonds are subject to interest rate, credit, and inflation risk.
- Investments in securities issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.
- Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks. Funds that concentrate on a relatively narrow market sector face the risk of higher share-price volatility.
- Past performance is no guarantee of future results.