Dollar-based investing, also known as dollar-based trading, is a feature that lets you invest in a security based on a dollar amount of your choosing, instead of having to place an order for a number of shares. This means you can purchase fractions of shares, rather than having to calculate what you can afford to buy based on the price of a full share.
At Vanguard, you can use dollar-based trading to buy mutual funds or Vanguard ETFs®. It's particularly useful for investors who want to diversify their portfolio, even without enough cash to buy whole shares of higher-priced investments.
With dollar-based trading, you can invest smaller amounts of money and still gain exposure to a broad range of investments. 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
Dollar-based trading not only helps to simplify the investing process; it also allows you to be more efficient with the money you want to invest. That's because you can put every available dollar to work, rather than waiting to purchase a full share of a particular investment.