What's an ETF?
An ETF is a collection of hundreds or thousands of stocks, bonds, or other securities, managed by experts, in a single fund that trades on major stock exchanges, like the New York Stock Exchange, Nasdaq, and Cboe. ETFs offer diversification, low costs, and the ability to trade shares live during the trading day.
4 benefits of investing in Vanguard ETFs
ETF investment strategies at Vanguard
With a variety of options, you can choose ETFs that best fit your goals, values, and overall portfolio strategy.
What does it cost to invest at Vanguard?
ETFs vs. mutual funds
Vanguard ETFs and mutual funds both offer diversification, multiple holdings, professional management, dividend reinvestment, and commission-free trading online through Vanguard Brokerage Services.5 However, depending on your investing strategy, one may be a better fit for your portfolio than the other.
How do I invest in an ETF?
Start investing in an ETF by opening a Vanguard Brokerage Account or logging in to your existing account. Enter the ETF trade path through the Buy & sell page.
Which ETFs are good to invest in?
Every investor is unique. Use our questionnaire to find an asset mix—a combination of stocks, bonds, and short-term reserves—that fits your investment goals and risk tolerance.
2 ways to open an investment account
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Helpful resources
ETFs vs. mutual funds: A comparison
Vanguard international bond and stock ETFs
How mutual funds & ETFs are taxed
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.
Yes, if you're investing in an ETF that includes stocks, bonds, or other securities that generate income, you can expect to receive dividends. Dividends are often reinvested automatically or taken as cash, depending on your preference and the terms of the ETF. Distributions are typically made on a quarterly basis, but it can vary depending on the ETF and its assets. With Vanguard ETFs, you have the option to use your dividends to automatically buy more fractional shares of the fund.
1For the 10-year period ended September 30, 2025, 48 of 52 Vanguard stock ETFs and 9 of 16 Vanguard bond ETFs—for a total of 57 of 68 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.
5Commission-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.
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.
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.
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.
Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.
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.