Exchange-traded funds (ETFs)
Optimize your trading strategy with the diversification, affordability, and tax efficiency of Vanguard ETFs®.
What's an ETF?
An ETF is a collection of hundreds or thousands of stocks, bonds, or other securities, managed by experts, in a single fund that trades on major stock exchanges, like the New York Stock Exchange, Nasdaq, and Cboe. ETFs offer diversification, low costs, and the ability to trade shares live during the trading day.
4 benefits of investing in Vanguard ETFs
Competitive, long-term returns
${cf.content-variables.outperformance.etfsOverall} of Vanguard ETFs outperformed the returns of their peer-group averages over the past 10 years.*
Lower taxes
82% of all Vanguard ETFs have had no taxable capital gains distributions in the last 5 years.*
Lower expense ratios
Our average ETF expense ratio is ${cf.tokens.expense-ratios.lessThanIndAvgPercent} less than the industry average.*
Better prices for your trades
99.5% of all Vanguard ETF shares bought and sold through a Vanguard account were executed at a better price than the quoted market price.*
ETF investment strategies at Vanguard
With a variety of options, you can choose ETFs that best fit your goals, values, and overall portfolio strategy.
Core ETFs
Build a fully diversified portfolio with our 4 total-market ETFs that cover nearly all aspects of the U.S. and international stock and bond markets.
ESG ETFs
Explore funds that reflect your personal preferences and consider environmental, social, and governance (ESG) issues.
Short-term ETFs
These ETFs can help you diversify your portfolio and save for short-term goals—like a down payment on a car or home.
ETFs vs. Mutual funds
ETFs (exchange-traded funds) and Mutual funds are similar in many ways, but there are a few key differences that set them apart.
Learn more about the difference between ETFs and mutual funds
ETFs
An ETF is a collection of hundreds or thousands of stocks, bonds, or other securities, managed by experts, in a single fund that trades on major stock exchanges.
- You can buy and sell ETFs throughout the trading day and get real-time pricing, just like stocks.
- Vanguard ETFs have a $1 investment minimum. Minimums for all other ETFs are set at the share price.
- ETFs are generally more tax-efficient than mutual funds.
- We offer both index and actively managed ETFs.
Mutual funds
A mutual fund is a collection of stocks, bonds, or other securities, managed by experts, in a single fund that's bought and sold at the end of each trading day based on its net asset value (NAV).
- You can place buy or sell orders for mutual funds throughout the trading day. However, these trades are processed and priced at the end of the day at NAV.
- Investment minimums can range from $1,000 to $50,000, depending on the fund.
- Mutual funds are generally less tax-efficient than ETFs.
- We offer both index and actively managed funds.
How do I invest in an ETF?
Start investing in an ETF by opening a Vanguard Brokerage Account or logging in to your existing account. Enter the ETF trade path through the Buy & sell page.
Which ETFs are good to invest in?
Every investor is unique. Use our questionnaire to find an asset mix—a combination of stocks, bonds, and short-term reserves—that fits your investment goals and risk tolerance.
2 ways to open an investment account
Do it yourself
Both industry experts and everyday people rely on our high-performing,* low-cost mutual funds and ETFs. Choose from diverse investments to save for your financial goals.
Explore professional advice
Whatever you're working toward, we have a range of services to help you get there. Get a personalized plan and judgment-free guidance to keep you on track.
Resources for ETF investing
Frequently asked questions
What's an expense ratio?
An expense ratio reflects how much an ETF pays for portfolio management, administration, marketing, and distribution, among other expenses. The lower the expense ratio, the more of the fund's earnings investors get to keep. These costs don't come out of your original investment—instead, they're deducted from the fund's total value on a regular basis.
Are ETFs tax-efficient?
ETFs can be tax-efficient. Most ETFs try to track an index, like the S&P 500. They only add and remove securities when the index does. Big moves—like when a company is completely removed from an index—happen very rarely. So you'll usually have few, if any, capital gains distributions to report at tax time.
Do ETFs pay dividends?
Yes, if you're investing in an ETF that includes stocks, bonds, or other securities that generate income, you can expect to receive dividends. Dividends are often reinvested automatically or taken as cash, depending on your preference and the terms of the ETF. Distributions are typically made on a quarterly basis, but it can vary depending on the ETF and its assets. With Vanguard ETFs, you have the option to use your dividends to automatically buy more fractional shares of the fund.