Investors do not have to have an account with Vanguard to buy and sell its mutual funds and exchange-traded funds (ETFs). Vanguard maintains agreements with other brokers to give their clients access to Vanguard funds.
Similar arrangements with online brokerages and investment houses allow the purchase and sale of mutual funds and ETFs managed by other investment companies including Fidelity, Charles Schwab, and BlackRock.
There can be a catch. All brokers, even online discount brokers, charge some fees and commissions. Some allow certain Vanguard funds and other funds to be bought and sold commission-free, and others don't.
Key Takeaways
- Investors can buy and sell Vanguard mutual funds and ETFs through online brokers, full-service brokers, and financial advisors.
- If you buy directly through Vanguard, you may benefit from lower fees, better customer service, and additional product research.
- Buying a Vanguard fund through a broker may involve commissions, loads, or other charges that are imposed by the broker, not by Vanguard directly.
The Vanguard Funds Story
A financial company giant, with about $8.6 trillion in assets under management as of the end of 2023, the Vanguard Group offers a wide selection of exchange-traded funds (ETFs) and mutual funds that invest in bonds and equities with various investment objectives and market niches.
Vanguard bond funds specialize in corporate bonds (as opposed to government or sovereign bonds). Vanguard equity funds specialize in investing in international stocks, domestic stocks, and various sector-specific equities.
Vanguard ETFs and mutual funds have very low and highly competitive fees that are substantially below the fund industry averages. Although some of its mutual funds are actively managed, other funds, and most of its ETFs, use a hands-off indexing approach.
In fact, Vanguard's late founder, John Bogle (1929-2019) is credited with bringing an index-investing strategy, once the purview of institutional investors, to the retail crowd. One year after it was founded in 1975, Vanguard began selling mutual funds that tracked indexes and passed the minimal costs of passive management on to investors.
Its fees were the lowest in the industry. Its management structure is unique as well: In contrast to most fund management companies, Vanguard functions more like a mutual fund credit union and is owned by investors in its funds.
Vanguard was also a pioneer in selling its funds directly to investors rather than via brokers, a practice that allowed it to reduce or eliminate sales fees. Today, it's known for its family of no-load, high-performing funds that include more than 200 mutual funds and 75 ETFs in the U.S. alone.
Miscellaneous fees tend to be low with Vanguard funds, incurred mainly if a client doesn't meet an account balance minimum of $10,000 and forgoes electronic documents.
Vanguard Funds at Third-Party Brokers
While Vanguard offers almost all of its mutual funds and ETFs commission-free through its own proprietary investment platform, a wide selection of the same funds is available for purchase at third-party brokers.
Vanguard typically negotiates agreements with other brokers to offer some of its funds free of commissions, while the remaining Vanguard funds are subject to the standard trading fees of a particular broker.
What Types of Accounts Does Vanguard Offer?
Vanguard offers a variety of accounts, including accounts geared toward college savings, small business owners, retirement savers, and others. Some of the most common accounts include individual and joint brokerage accounts, corporate investment accounts, 529 savings plans, trusts, IRAs, Roth IRAs, and 401(k)s.
Do You Save Money If You Buy From Vanguard Directly?
In many cases, buying and selling Vanguard funds directly through Vanguard is less expensive than making the same purchase through a broker. This is true for other fund investment companies such as Fidelity and BlackRock.
The investment companies sell their own products directly with minimal or no fees attached. All third-party brokers and investment advisers have fees attached to some of their services. Fees may be charged for trading all or some of the funds available through them.
Which Brokerages Sell Vanguard Funds?
In addition to Vanguard Brokerage Services, Fidelity, Charles Schwab, E-Trade, and Interactive Brokers are among the financial services firms that sell Vanguard Funds.
The Bottom Line
By offering its funds through multiple investment platforms, Vanguard creates a much wider network of brokers that reaches out to a higher number of investors who want to invest in Vanguard ETFs and mutual funds.
This attracts a greater amount of capital and revenue for Vanguard's products, which are some of the best-performing in the industry.
