Vanguard has a highly competitive selection of exchange traded funds (ETFs) available for purchase at numerous investment brokers' platforms. Vanguard ETFs typically use a passive investment approach and follow a particular stock or bond index.
Key Takeaways
- Vanguard is a major investment management firm serving more than 30 million investors and offering 410 funds worldwide.
- Vanguard offers mutual funds (in addition to 130 Vanguard funds), exchange-traded funds (ETFs), and bonds.
- There is no dollar value minimum investment for Vanguard's ETFs, however, the minimum investment for any market participant is the cost of one share. Share prices fluctuate.
Vanguard ETFs: Minimum Investment?
Unlike Vanguard's mutual funds, Vanguard ETFs do not have any strict minimum investment requirements because their shares are traded and treated as any other stock. While there is no minimum dollar amount for Vanguard ETFs, the minimum investment is the cost of one share. Depending on the ETF chosen, one share could cost as little as $50.
For example, as of Aug. 19, 2022, Vanguard's VTIP ETF, reflecting short-term inflation-protected securities, had a share price of $49.99. Meanwhile, VOO, which is Vanguard's ETF that tracks the S&P 500, had a share price of $388.17.
To give another example, the minimum investment for VTI, one of Vanguard's most popular ETFs that track the US stock market as a whole, had a share price of $211.79.
1 share
The minimum investment cost of a Vanguard ETF.
Advantages of Vanguard ETFs
Vanguard offers various ETFs with a wide spectrum of investment objectives at very low expense ratios. Because of its superior investment sampling methodology, Vanguard ETFs are popular and known for their low turnover ratios, low tracking errors, and low expense ratios. The Vanguard average ETF expense ratio comes in at about 0.06%, which is significantly below the ETF industry's average expense ratio of 0.24%.
Different Types of Vanguard ETFs
Vanguard offers different categories of ETFs that broadly specialize in investing in fixed-income securities or stocks. Currently, Vanguard offers more than 80 different ETFs. The majority of Vanguard ETFs invest in domestic stocks on U.S. equity markets, while the second-largest category of Vanguard ETFs is taxable bonds.
There are also a few ETFs in the international stocks and specialty categories. The specialty category includes ETFs that track the performance of an industry or sector-specific index, such as energy, financials, healthcare, and information technology.
