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.

Discover the advantages of Vanguard ETFs®

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.

Expand your portfolio with a Vanguard 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.

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

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.

Put your savings on autopilot 

Minimum investment

ETFS

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

See a complete list of Vanguard ETFs 

MUTUAL FUNDS

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

See a complete list of Vanguard mutual funds