How to invest

All about ETFs

An intro to Tim Buckley’s webcast video on ETFs
3 minute watch
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April 14, 2022
How to invest
Understanding investment types
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ETFs

Mutual funds have been the foundation of long-term investing, but ETFs (exchange-traded funds) have gained more popularity in recent years, and for good reason.

What is an ETF? An ETF is a collection of hundreds or thousands of stocks or bonds in a single fund that trades on major stock exchanges, like the NYSE or the Nasdaq. ETFs are similar to mutual funds in that they’re both professionally managed funds and both trade commission-free at Vanguard (some non-Vanguard mutual funds do have a commission).

What are the benefits of ETFs? Unlike mutual funds that could require a hefty minimum investment, you can purchase just 1 share of an ETF at the market price, and you have more control over the order type. If you want to enjoy these benefits while still investing in an index fund, take a look at Vanguard index ETFs.

Branching out isn’t always easy, but adding an ETF (or 2!) can enhance and further diversify your portfolio. 

Want to learn more about ETFs?

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For more information about Vanguard funds or ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

All investing is subject to risk, including the possible loss of the money you invest.

U.S. ETF assets under management and cash flow figures as of December 31, 2021. Source: Morningstar.

The information contained herein does not constitute tax advice and cannot be used by any person to avoid tax penalties that may be imposed under the Internal Revenue Code. Each person should consult an independent tax advisor about his/her individual situation before investing in any fund or ETF.

© 2022 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor of the Vanguard Funds.

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