Skip to main content

ETF investing can add flexibility to your portfolio

Get more control over your investments while enjoying the same benefits as mutual funds.

What is an ETF?

The simplest definition of an exchange-traded fund, or ETF, is that it's an investment that's built like a mutual fund but trades like an individual stock.

The most common ETFs are designed to track the performance of a market benchmark, or "index."

Enjoy the same built-in benefits of mutual funds

Diversification

One fund can hold potentially hundreds—sometimes thousands—of individual stocks and bonds, which helps spread out risk.

Professional management

You don't have to keep track of every single investment your ETF owns. The fund is managed by fund experts who take care of that for you.

Get more control with ETFs—at lower costs

While ETFs are in many ways the same as mutual funds, there are some features that make them unique.

Trading flexibility

ETFs offer you the same intraday pricing you get when trading stocks and bonds through a broker on a major stock exchange.

Lower cost

Funds that track an index, like ETFs and index mutual funds, generally offer lower expense ratios than conventional mutual funds.

Tax savings

Like index mutual funds, ETFs are typically more tax-efficient, which could translate into tax savings for you.

Lower minimums

You can buy an ETF for as low as the cost of one share—giving you the opportunity to start investing in a diversified investment with less money.

Consider your ETF options

Find out how ETFs can fit into your overall investment strategy. You can use them to create a complete portfolio or add them to an already diversified portfolio.

Once you've chosen your ETFs, it's easy to open your account.

Open your account online

We're here to help

If you're new to Vanguard:

Call 888-241-1395

Monday to Friday
8 a.m. to 8 p.m., Eastern time

If you're already a Vanguard client:

Call 888-992-8327

Monday to Friday
8 a.m. to 10 p.m., Eastern time

Saturday
9 a.m. to 4 p.m., Eastern time

REFERENCE CONTENT

Layer opened.

Market benchmark

An unmanaged group of securities whose overall performance is used as a standard to measure investment performance.