You can go to
www.vanguard.com and select a Target Retirement fund that corresponds to the date you might need the money for your daughter. So if she is going to college in 2025, you can use the 2025 fund. Vanguard uses passive management so you won't have a lot of taxes to pay each year, but you will have some.
The advantage of the mutual fund account is that there are no restrictions on how and when you can use it and you can choose any investment vehicle you want.
The disadvantage is that you have to pay taxes on your gains.