What is the best Vanguard Fund to invest in and let it sit for 15-20 years?

I have about $20,000 to play around with and I do not need this money to stick away in a 401K or an IRA as I already put money in there. I would like to put this money away in a Vanguard fund and let it sit for 15/20 years and then have some fun with the money. What would be the best funds for tucking this money away? And the most efficent for tax purposes?
Thanks in advance for your help!

You actually have two different funds defined by your question. One for best return and one for most efficient for tax purposes. Those definitely are two different funds.

For tax efficiency the Vanguard 500 index fund would be one good choice. During 10 years this fund has lost only 0.5% to taxes annually.

But my favorite Vanguard fund in the Global Equity fund. Well diversified. Not too tax efficient though. During 10 years this fund has lost almost 1.4% annuallly to taxes. But it has outperformed the 500 index fund over 10 years by 4.6% annually. Based on past history which of course may not hold true for the next 20 years, that extra 4.6% would mean to you an extra $49,000.

If I were you that is the one I would put some of that $20,000 into. Not all of it. No. Remember that diversity pays big dividends over the long term. Put some also into the 500 index fund, maybe $5000. Put some also into the Energy fund. The era of cheap energy is gone I think for ever. Might as well take advantage of the trend. Put a little into the Health Care fund also. I think that has much more risk because the government is very likely to step in and squash the health care industry. They have been screwing the public without remorse for just too long, but who knows. It is the fastest growing industry and there are all of those 80 year olds that are piling up.

There have been numerous studies done to see whether or not actively managed mutual funds beat the S&P500 index. Most, perhaps even all, do not over the long haul.

So, I would put that money in an S&P index fund. The service fees on a Vanguard index fund are also very low.

As for taxes - if you want to avoid taxes then the only thing you can do is to invest in a tax free bond fund. I am out of my element there, so perhaps others can advise. Bond funds can be tricky.

Vanguard Total Stock Market Index Fund...VTSMX. If you really will be patient and let it sit that long, you will do just fine.

So many different variables to answer that question especially related to your personal risk/reward tolerances.

However, the standard answer would probably be the old Vanguard 500 Index Fund that tracks the S&P 500 Index. Since its inception it has an average annual return of over 12% and that is going back to 1976.

The best thing would be to visit the vanguard.com site and answer some risk/reward questions. They have many tools that would help you decide what you are really trying to achieve.

Why use only one fund? Although, Vanguard is a good company, there are lots of good mutual fund companies out there.

Check out morningstar.com where you can get detailed reports on mutual funds, rankings, standard deviations, etc.

For $20k, you should consider at least 4 funds or more diversified across domestic, international and emerging markets.