What's an ETF?
An ETF is a collection of hundreds or thousands of stocks or bonds, managed by experts, in a single fund that trades on major stock exchanges, like the New York Stock Exchange, Nasdaq, and Chicago Board Options Exchange.
Vanguard ETF strategies
A strategy is the general or specific approach to investing based on your goals, risk tolerance, and time horizon. See what's best for you.
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 diversify your portfolio and save for short-term goals—like a down payment on a car or home.
What does it cost to invest at Vanguard?
Help your money grow at Vanguard
Investing in ETFs offers benefits you may not get from trading individual stocks or bonds on your own.
Benefits of investing in Vanguard ETFs
Over the past 10 years,
84% of Vanguard ETFs
beat the returns of their peer-group averages.1
In the past 5 years, 81% of all Vanguard ETFs have had no taxable capital gains distributions.
81%
You'll pay no more than of Vanguard ETFs had.2
0
taxable capital gains distributions.
Of all Vanguard ETF shares bought and sold through a Vanguard account,
99.5%
of the shares were executed at a better price than the quoted market price.4
At a glance: 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.
Features |
ETFs |
Mutual funds |
|---|---|---|
| Diversification |  |
|
| Multiple holdings | |
|
Commission-free online at Vanguard Brokerage |
|
|
Professional management |
|
|
| Dividend reinvestment | |
|
| Intraday trading | |
|
| Automatic investment | |
|
Investment minimums |
$1 for Vanguard ETFs®; at share price for all other ETFs |
Can range from $1,000 to $50,000 depending on the fund |
| Tax efficiency | Generally more |
Generally less |
| Management style | Vanguard has both index and active ETFs. |
Vanguard has both index mutual funds and actively managed funds. |
Features |
ETFs |
|---|---|
| Diversification | |
| Multiple holdings | |
Commission-free online at Vanguard Brokerage |
|
Professional management |
|
| Dividend reinvestment | |
| Intraday trading | |
| Automatic investment | |
Investment minimums |
$1 for Vanguard ETFs®; at share price for all other ETFs |
| Tax efficiency | Generally more |
| Management style | Vanguard has both index and active ETFs. |
Features |
Mutual funds |
|---|---|
| Diversification | |
| Multiple holdings | |
Commission-free online at Vanguard Brokerage |
|
Professional management |
|
| Dividend reinvestment | |
| Intraday trading | |
| Automatic investment | |
Investment minimums |
Can range from $1,000 to $50,000 depending on the fund |
| Tax efficiency | Generally less |
| Management style | Vanguard has both index mutual funds and actively managed funds. |
#1 Most Trusted Financial Companies—ETF/Fund Companies
Awarded August 2022 based on data as of June and July 2022.5
No compensation provided for award consideration.
Compensation provided for use of rating in Vanguard marketing.
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How mutual funds & ETFs are taxed
Investment portfolios: Asset allocation models
Frequently asked questions
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.
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.
Almost all ETFs are commission-free.
All Vanguard ETFs and non-Vanguard ETFs, including leveraged and inverse ETFs, trade online commission-free.6 Trades placed over the phone may be subject to a $25 broker-assisted commission. All ETF sales are subject to a securities transaction fee. For full details, including exclusions and other fees that may apply, see the Vanguard Brokerage Services commission and fee schedules. Leveraged and inverse ETFs may be identified with “2x,” “ultra,” “daily,” or something similar in their name.
Leveraged and inverse ETFs are designed to be bought and sold within a short time (for example, 1 day or 1 month), making them extremely speculative in nature. These risky investments are meant to be used as short-term trading tools. They're not intended for buy-and-hold investing.
On January 22, 2019, Vanguard Brokerage stopped accepting purchases in leveraged and inverse ETFs, as well as leveraged and inverse mutual funds and ETNs (exchange-traded notes). If you already own these investments, you can continue to hold them or choose to sell them. You can also transfer them in kind from or to other institutions.