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What's a mutual fund?
A mutual fund is a collection of investors' money that fund managers use to invest in stocks, bonds, and other securities.
Lower costs
Our average expense ratio across our index mutual funds and ETFs is 83% lower than the industry average.*
Less risk through more diversification
One mutual fund can invest in hundreds—sometimes thousands—of individual securities at once. So if any one security does poorly, the others are there to help offset that risk.
Professional management
You don’t have to keep track of every security your mutual fund owns. The fund is managed by experts who take care of that for you.
Convenience
You can buy and sell mutual fund shares online and set up automatic investments and withdrawals.
More than an investor
You're not just a client when you invest with us. You're also an owner. See what makes Vanguard different.
- See your accounts at a glance
- A detailed look at your portfolio
- A snapshot of your retirement savings
- One page for your trading needs
- Easily manage your profile preferences
Vanguard mutual fund options
Index funds
Enjoy the benefits of diversification, tax efficiency, and low costs with index mutual funds.
Actively managed funds
Our diligent selection of talent, paired with our consistent investment approach and client-first focus, sets our actively managed funds apart.
Target retirement funds
You make just one decision and the fund's managers do all the rebalancing for you.
ESG funds
Invest in what matters to you. Our ESG (environmental, social, governance) funds allow you to invest in funds that align with your personal preferences.
Choose from more than just Vanguard funds
Your choice, your way. Your brokerage account gives you access to a wide variety of mutual funds—many without commissions—from hundreds of companies.
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 |
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Diversification The strategy of investing in multiple asset classes and among many securities in an attempt to lower overall investment risk. |
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| Multiple holdingsThese investment products hold hundreds to thousands of stocks, bonds, and more. |
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| Commission-free at Vanguard | |
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| Professional management | |
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| Dividend reinvestmentYou have the option to use your dividends to automatically buy more fractional shares of the fund. |
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| Intraday tradingBuying and selling investment products throughout the same trading day like a stock. |
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| Automatic investmentA "set it and forget it" option. You can set up an automatic transaction into the fund from your bank. You can choose the dollar amount you want to invest as well as the date and frequency that you'd like the transactions to occur. |
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| 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 |
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| Tax efficiencySome investment products generate less taxable income. |
Generally more |
Generally less |
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| Management style | Most ETFs are index funds, meaning they're not actively managed by a portfolio manager. |
Vanguard has both index mutual funds and actively managed funds. |
Features |
ETFs |
Mutual funds |
| DiversificationThe strategy of investing in multiple asset classes and among many securities in an attempt to lower overall investment risk. |
|
|
| Multiple holdingsThese investment products hold hundreds to thousands of stocks, bonds, and more. |
|
|
Commission-free at Vanguard |
|
|
Professional management |
|
|
| Dividend reinvestmentYou have the option to use your dividends to automatically buy more fractional shares of the fund. |
|
|
| Intraday tradingBuying and selling investment products throughout the same trading day like a stock. |
|
|
| Automatic investmentA "set it and forget it" option. You can set up an automatic transaction into the fund from your bank. You can choose the dollar amount you want to invest as well as the date and frequency that you'd like the transactions to occur. |
|
|
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 efficiencySome investment products generate less taxable income. |
Generally more |
Generally less |
Management style |
Vanguard has both index and active ETFs. |
Vanguard has both index mutual funds and actively managed funds. |
Helpful resources
Investing on your own?
Check out key information you can use as you begin your successful DIY investing journey.
Get professional advice
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Other investment products
We have a variety of products to select from. See which best fits your needs.
Frequently asked questions
Start with your savings goals to get an idea of how aggressive you want your investments to be based on your risk tolerance and how long you'd like your money to be invested. Then determine the best asset allocation for your goals, and select a mutual fund to help build your diversified portfolio. Once you identify your investment time horizon and your portfolio's allocation, you might also want to consider whether you want an index fund or an actively managed fund.
Index funds, also known as passively managed funds, are built to follow a market benchmark like the S&P 500 Index or Dow Jones Industrial Average. Active funds are managed by fund managers who handpick the fund's investments in an attempt to beat the market.
You'll often see the phrase “mutual funds trade at NAV” or the word “NAV” when you research mutual funds. NAV stands for net asset value—it's the price per share that you buy the mutual fund for. The NAV is calculated at the end of the trading day.
*Vanguard average index ETF and mutual fund expense ratio: 0.06%. Industry average index ETF and mutual fund expense ratio: 0.23%. All averages are asset-weighted. Industry average excludes Vanguard. Sources: Vanguard and Morningstar, Inc., as of December 31, 2022.
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.
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.
You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services commission and fee schedules 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.
ESG portfolios 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 portfolios screened for ESG criteria. The index provider or advisor 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 portfolios 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 certain screens 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. 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. The weight given to ESG factors for active non-ESG funds may vary across types of investments, industries, regions and issuers; may change over time; and not every ESG factor may be identified or evaluated. Where ESG risk factor analysis is used as one part of an overall investment process (as is the case for actively managed equity and fixed income non-ESG Funds), such Funds may still invest in securities of issuers that all market participants may not view as ESG-focused or that may be viewed as having a high ESG risk profile.
Vanguard is investor-owned, meaning the fund shareholders own the funds, which in turn own Vanguard.