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, 82% of all Vanguard ETFs have had no taxable capital gains distributions.
99%
of Vanguard ETFs had no capital gains distribution in 2024.2
0
equity ETFs have had a capital gains distribution in the last 3 years.
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 investment5 | |
|
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 investment5 | |
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 investment5 | |
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. |
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Ranked highest in investor satisfaction among DIY investors.
Reported by J. D. Power. Based on survey results from October 2022 to January 2023.
For J.D. Power 2023 award information, visit jdpower.com/awards. View methodology
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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.
1For the 10-year period ended March 31, 2025, 48 of 52 Vanguard stock ETFs and 8 of 15 Vanguard bond ETFs—for a total of 56 of 67 Vanguard ETFs—outperformed their Lipper peer-group averages. Results will vary for other time periods. Only ETFs with a minimum 10-year history were included in the comparison. Source: LSEG Lipper. The competitive performance data shown represent past performance, which is not a guarantee of future results. View ETF performance.
2Source: Morningstar, Inc., as of December 31, 2024.
3Vanguard average ETF expense ratio: 0.05%. Industry average ETF expense ratio: 0.22%. All averages are asset-weighted. Industry average excludes Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2024.
4Source: The Karn Group. Includes market orders entered from January 2024 through August 2024, during market hours with share sizes from 1 to 1,999. Excludes orders received during locked, crossed, or fast markets or during destination outages.
5The ETF AIP (Automatic Investment Plan) cannot be used to make IRA contributions to ETFs within the IRA or be used on Margin accounts.
6Commission-free trading of Vanguard ETFs applies to trades placed online; most clients will pay a commission to buy or sell Vanguard ETFs by phone. Commission-free trading of non-Vanguard ETFs applies only to trades placed online; most clients will pay a commission to buy or sell non-Vanguard ETFs by phone. Vanguard Brokerage reserves the right to change the non-Vanguard ETFs included in these offers at any time. All ETFs are subject to management fees and expenses; refer to each ETF's prospectus for more information. Account service fees may also apply. All ETF sales are subject to a securities transaction fee. See the Vanguard Brokerage Services commission and fee schedules for full details.
All investing is subject to risk, including the possible loss of the money you invest.
Diversification does not ensure a profit or protect against a loss.
For more information about Vanguard mutual funds or Vanguard ETFs, obtain a mutual fund or an ETF prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.
You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free online) or through another broker (who may charge commissions). See the Vanguard Brokerage Services commission and fee schedules for limits. Vanguard ETF Shares are not redeemable directly with the issuing Fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.
Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments.
ESG funds are subject to ESG investment risk, which is the chance that the stocks or bonds screened by the index provider or advisor, as applicable, for ESG criteria generally will underperform the market as a whole or, in the aggregate, will trail returns of other funds screened for ESG criteria. The index provider or advisor's assessment of a company, based on the company's level of involvement in a particular industry or their own ESG criteria, may differ from that of other funds or an investor's assessment of such company. As a result, the companies deemed eligible by the index provider or advisor may not reflect the beliefs and values of any particular investor and may not exhibit positive or favorable ESG characteristics. The evaluation of companies for ESG screening or integration is dependent on the timely and accurate reporting of ESG data by the companies. Successful application of the screens will depend on the index provider or advisor's proper identification and analysis of ESG data. The advisor may not be successful in assessing and identifying companies that have or will have a positive impact or support a given position. In some circumstances, companies could ultimately have a negative or no impact or support of a given position.
Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.
The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.
VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.