Skip to main content

Compare ETFs vs. mutual funds

It may surprise you just how similar ETFs and mutual funds really are—just a few key differences set them apart.

How ETFs and mutual funds are the same

Less risk through more diversification

One ETF or mutual fund can invest in hundreds (sometimes thousands) of stocks or bonds in a single fund.

Professional management

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

How ETFs and mutual funds are different


Buying & selling

ETFs

You can only buy and sell ETFs through a brokerage account.

MUTUAL FUNDS

You can buy and sell mutual funds through your Vanguard mutual fund account.


Trading & pricing

ETFs

You can trade ETFs on the major stock exchanges anytime during the trading day. Their prices will fluctuate throughout the day just like stocks.

MUTUAL FUNDS

Mutual fund shares are priced once a day after the markets close.


Transaction costs

ETFs

You won't pay any commissions to trade Vanguard ETFs in a Vanguard Brokerage Account.*

There's an unavoidable cost when trading individual stocks, bonds, and ETFs known as the bid-ask spread.

MUTUAL FUNDS

In most circumstances, there are no transaction costs when you buy and sell your mutual fund shares at Vanguard.**


Automatic investing

ETFs

There's no automatic investment option for ETFs.

MUTUAL FUNDS

Invest your savings on a regular schedule by moving money directly from your bank account into your Vanguard accounts or set up automatic transfers from one Vanguard fund to another.


Minimum investment

ETFs

You can buy an ETF for the cost of a single share, which can vary throughout the trading day.

MUTUAL FUNDS

You can invest in a Vanguard mutual fund with as little as $1,000.†

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.

Bid-ask spread

The difference between the price a buyer is willing to pay (bid) for a security and the seller's offering (asking) price.

© 1995–2015 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor of the Vanguard Funds.
Your use of this site signifies that you accept our terms & conditions of use.
Security  |  Prospectuses  |  Careers  |  Mobile  |  Social media

1.0.0-M20150206-01, 17.950.0-M20141105-01