Vanguard ETFs® are popular for their low costs, strong historical performance, and tax efficiency. Like other ETFs (exchange-traded funds), they also offer the flexibility of intraday pricing, allowing investors to buy and sell shares throughout the trading day. Vanguard ETFs are now even more accessible thanks to dollar-based trading (also known as fractional share investing). This feature enables investors to purchase fractions of a share, making it easier to align investments with your budget and investment goals
Understanding investment types
Dollar-based trading: Buying fractional shares of Vanguard ETFs
Discover the benefits of fractional shares: Invest with as little as $1 , diversify your portfolio, and manage funds effectively with Vanguard ETFs.
Understanding investment types
ETFs
Page
Article
Diversifying
Rebalancing
What are fractional ETF shares?
Fractional ETF shares are portions of a single ETF share that you can buy or sell through dollar-based trading, which lets you choose any dollar amount (starting with as little as $1) to trade a Vanguard ETF. It makes investing in our ETFs simple and highly accessible. And if you need to withdraw your money in the future, you can redeem a specific dollar amount or a set number of shares.1
Invest like fund minimums don’t exist. If one share of an ETF is $100 and you have $50 to invest, you can purchase 1/2 of a share. If you have just $1 to invest, you can purchase 1/100 of a share.
Benefits of dollar-based trading
Invest by dollar amount
Think in dollars, not in shares, when you trade Vanguard ETFs. Buy a Vanguard ETF for as little as $1, regardless of the ETF's share price. And you don't have to leave a balance in your settlement fund unless you want to.
Withdraw exactly what you need
Sell a specific dollar amount from your portfolio and withdraw exactly what you need—nothing more, nothing less.
Rebalance by dollar amount
Rebalance your portfolio by dollar amount without having to convert shares to dollars (or vice versa). For example, you can sell $100 of your stock ETF and purchase $100 of a bond ETF.
Easily build a diversified portfolio
Handpick your own Vanguard ETF from our list of low-cost U.S. and international ETFs, or build a diversified portfolio by investing in just 4 total market ETFs.
Buy a Vanguard ETF
FAQs about dollar-based trading
You can absolutely make money with dollar-based trading, and you can also lose money. As with any other type of trading, buying and selling on a dollar basis is influenced by market forces, so there are no guarantees.
When you buy Vanguard ETFs for a specific dollar amount, you could end up with whole shares or fractional shares, depending on the price at the time of purchase. The same goes for selling. If you want to sell a specific dollar amount, the equivalent in whole and/or fractional shares is removed from your position, and since there are no commissions for trading Vanguard ETFs online in your Vanguard account, you get the exact dollar-and-cents amount you requested for the trade.
Note: Unlike online transactions with Vanguard ETFs, broker-assisted transactions may involve a commission. Learn more about brokerage fees
When you buy an ETF, you establish a position, or what's called a "basis." When you sell, the gains or losses are calculated based on the cost basis method you choose. This means you'll owe taxes on any gains, or you might be able to claim losses, depending on the amount you sold. It's a good idea to consult with a tax professional for more detailed guidance.
The rules change a bit if you're trading in a tax-sheltered account, like a traditional or Roth IRA. These accounts have their own tax implications, usually related to how you contribute and withdraw money. If you have specific questions about these accounts, it's best to talk to a qualified advisor or tax professional.
Yes—if the ETF pays a dividend, you'll get the same dividend amount based on the calculation. For example, if a Vanguard ETF is paying out a 0.1 share dividend for every 1.0 share you hold, and you have a 10.0 share position, you'll receive 1.0 shares in dividends.
If you have a 1.5 share position in Vanguard S&P 500 ETF (VOO) through dollar-based trading, you'd get 0.15 shares from the same dividend payout. It's all proportional to how much you own, even if it's just a fraction of a share.
Most Viewed
Investing strategies
Ready to invest? See how to open an account
Start with this step-by-step guide to opening a personal investment account, such as a general investing brokerage account or an IRA.
Retirement
Backdoor Roth IRA What it is and how to set it up
If you are a high-income earner, a Backdoor Roth IRA may be a good
retirement investment option for you. Learn what it is and how to set up this type of
retirement plan.
Understanding investment types
Are bonds a good investment right now?
Learn how high-quality bonds can play a valuable role in your portfolio in a high-yield environment.
Personal finance
Top 6 tips: Your year-end financial checklist
Get a checklist with money saving strategies to maximize your end-of-year savings, minimize your tax bill, and start your 2024 financial goals strong.
Company news
Discover our new international fund
- 1
- 2
- 1
- 2
Investing strategies
Ready to invest? See how to open an account
Start with this step-by-step guide to opening a personal investment account, such as a general investing brokerage account or an IRA.
Retirement
Backdoor Roth IRA What it is and how to set it up
If you are a high-income earner, a Backdoor Roth IRA may be a good
retirement investment option for you. Learn what it is and how to set up this type of
retirement plan.
Understanding investment types
Are bonds a good investment right now?
Learn how high-quality bonds can play a valuable role in your portfolio in a high-yield environment.
Personal finance
Top 6 tips: Your year-end financial checklist
Get a checklist with money saving strategies to maximize your end-of-year savings, minimize your tax bill, and start your 2024 financial goals strong.
Company news
Discover our new international fund
1If you buy or sell a specific dollar amount, the order type defaults to “market order” and the duration defaults to “day.”
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 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 about a fund 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.