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Buying & selling mutual funds—ours & theirs

Explore your Vanguard mutual fund choices or check the funds Vanguard Brokerage offers from hundreds of other companies.

POINTS TO KNOW

  • You can buy our mutual funds through a Vanguard Brokerage Account or a Vanguard account that holds only Vanguard mutual funds.
  • You must have a Vanguard Brokerage Account to buy funds from other companies.
  • To avoid buying the dividend and getting a tax surprise, you should check the capital gains and dividend distribution dates before buying mutual funds.

Investing in Vanguard mutual funds

Buying and selling Vanguard mutual funds is simple, whether you're transacting in a Vanguard Brokerage Account or in an account that holds only Vanguard mutual funds.

Here are details on fund prices, investment costs, and how to buy and sell.

Prices

 

Each business day, by law, mutual funds determine the price of their shares.

They do this by taking the current value of all a fund's assets, subtracting the liabilities, and dividing the result by the total number of outstanding shares.

A fund's share price is known as the net asset value (NAV).

If we receive your request to buy or sell a fund before the close of regular trading hours on the New York Stock Exchange (usually 4 p.m., Eastern time), your transaction will receive that day's closing price.

If we receive your request after the market closes, your transaction will receive the next business day's closing price.

Investment costs

 

Vanguard mutual funds strive to hold down your investing costs so you keep more of your returns. The funds offer:

  • Expense ratios below the industry average.*
  • An option for electronic delivery of account documents so you pay no account service fees.
  • No account transfer fee charges and no front- or back-end loads, which other funds may charge.

Buying & selling

 

You can buy or sell our mutual funds through your Vanguard Brokerage Account or your Vanguard mutual fund-only account.

If you buy or sell via a bank transfer, your bank account should be debited or credited within 2 business days.

Investing in mutual funds from other companies

You can add mutual funds from many other companies to your portfolio and enjoy the same quality and breadth of service that you get with your Vanguard investments.

Here are details on fund prices, investment costs, and how to buy and sell.

Prices

 

Like Vanguard mutual funds, orders for other companies' mutual funds execute at that business day's closing price as long as they're received before the cutoff time.

Unlike Vanguard mutual funds, the cutoff for other companies' funds varies by fund. You can find the cutoff time by clicking the fund's name as you place a trade. Orders received after this deadline will execute at the following business day's closing.

Investment costs

 

Vanguard Brokerage offers a variety of funds from other companies with no transaction fees (NTFs). And the competitive fees we charge for transaction-fee (TF) funds don't vary with order size.

Buying & selling

 

All funds bought and sold from other companies settle through your Vanguard money market settlement fund. Before you transact, find out how the settlement fund works.

Getting started

 

Generally, investing in other companies' funds is similar to investing in Vanguard mutual funds except that you must have a Vanguard Brokerage Account.

If you need to open a brokerage account, it's easy to do so online.

Other considerations

Here are some best practices for investing in mutual funds.

Is your fund declaring a dividend?

 

Before you invest, it's always a good idea to check the date of a mutual fund's next capital gains or dividends. If the payout is near, you may want to hold off investing to avoid "buying the dividend."

Frequent trading or market-timing

 

Some investors try to profit from strategies involving frequent trading of mutual fund shares, such as market-timing.

They buy in and out of a fund excessively, which can disrupt the fund's management and result in higher costs borne by all of a fund's shareholders.

We look for one of these behaviors:

  • Excessive purchase and redemption activity within the same fund.
  • Excessive exchange activity between 2 or more funds within a short time frame.

Vanguard Brokerage and the fund families whose funds can be traded through Vanguard Brokerage place certain limits on frequent transactions and reserve the right to decline a transaction if it appears you're engaging in frequent trading or market-timing.

Vanguard funds may also impose purchase and redemption fees to help manage the flow of investment money.

What's next?

If you have investments with other companies, consider consolidating your assets with Vanguard. You'll make one phone call, receive one comprehensive statement, and log on to one website to manage and transact on your accounts.


Get complete portfolio management

We can help you custom-develop and implement your financial plan, giving you greater confidence that you're doing all you can to reach your goals.

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REFERENCE CONTENT

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Mutual fund

A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.

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No-transaction fee (NTF) fund

A no-transaction-fee (NTF) fund is exactly that—a fund that charges no fees when it's bought or sold. Vanguard Brokerage, however, imposes an NTF redemption fee on shares held less than a specified period. For more information, see the Vanguard Brokerage Services® commission and fee schedules.

The NTF redemption fee is in addition to any short-term redemption fees charged by the fund family. View a fund's prospectus for information on redemption fees.

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Transaction-fee fund

A fund that charges a fee to buy or sell shares.

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Settlement fund

A money market mutual fund that holds the money you use to buy securities, as well as the proceeds whenever you sell.

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Assets

Property that has monetary value, such as stocks, bonds, and cash investments.

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Liability

Outstanding debt.

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Outstanding shares

Stock currently held by investors, including restricted shares owned by the company's officers and insiders as well as those held by the public.

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Net asset value (NAV)

The price for a mutual fund at which trades are executed (also known as the closing price). It's calculated at the end of each business day.

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Regular trading hours

Regular trading hours on the New York Stock Exchange (NYSE) and most exchanges are Monday through Friday, 9:30 a.m. to 4 p.m., Eastern time. (The exchanges close early before some holidays.)

After regular hours end, an extended-hour session (4:15 p.m. to 6:30 p.m., Eastern time) is available to place limit orders. An order placed during the extended session is automatically canceled at the end of the session if it doesn't execute.

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Closing price

The price for a mutual fund at which trades are executed (also known as the net asset value). It's calculated at the end of each business day.

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Return

The profit you get from investing money. Over time, this profit is based mainly on the amount of risk associated with the investment. So, for example, less-risky investments like CDs (certificates of deposit) or savings accounts generally earn a low rate of return, and higher-risk investments like stocks generally earn a higher rate of return.

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Expense ratio

The annual operating expenses of a mutual fund or ETF (exchange-traded fund), expressed as a percentage of the fund's average net assets. It's calculated annually and removed from the fund's earnings before they're distributed to investors, directly reducing investors' returns. For example, if you had $10,000 invested in a fund with an expense ratio of 0.20%, you'd pay about $20 a year out of your investment returns.

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Load

A sales fee charged on the purchase or sale of some mutual fund shares. The load may be called a charge or commission. The fee may be a onetime charge when you buy fund shares (front-end load), or when you sell fund shares (back-end load), or it may be an annual 12b-1 fee charged for marketing and distribution activities.

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Load

A sales fee charged on the purchase or sale of some mutual fund shares. The load may be called a charge or commission. The fee may be a onetime charge when you buy fund shares (front-end load), or when you sell fund shares (back-end load), or it may be an annual 12b-1 fee charged for marketing and distribution activities.

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Capital gain/loss

The difference between the sale price of an asset (such as a mutual fund, stock, or bond) and the original cost of the asset. A capital gain/loss is "unrealized" until the investment is sold, when it becomes a realized gain/loss. Realized gains are taxable and they may be considered short-term (if the investment was owned one year or less) or long-term (if the investment was owned for more than one year).

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Dividend

The distribution of the interest or income produced by a mutual fund's holdings to the fund's shareholders, or a payment of cash or stock from a company's earnings to each stockholder. Dividends can be distributed monthly, quarterly, semiannually, or annually.

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Excessive exchange activity

Exchange activity is considered excessive when:

  • It exceeds 2 substantive exchanges less than 30 days apart during any 12-month period.
  • There's rapid movement into and out of several funds in clear violation of the suggested holding periods specified in the funds' prospectuses.

Exchange activity into and out of funds without a suggested holding period is assessed on a case-by-case basis.

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Purchase & redemption fees

Some funds charge a fee when you buy shares to offset the cost of certain securities. Some funds charge a fee when you sell fund shares, or when you buy or sell shares within a specific time period. These restrictions are an effort to discourage short-term trading.

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Market-timing

An investment strategy based on predicting market trends. The goal is to anticipate trends, buying before the market goes up and selling before the market goes down.

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Share

A single unit of ownership in a mutual fund or an ETF (exchange-traded fund) or, for stocks, a corporation.