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.
FAQs
You can buy a Vanguard ETF for as little as $1. Non-Vanguard ETFs can be purchased for as little as the cost of one share. A mutual fund may not be a suitable investment. Mutual fund minimum initial investments aren't based on the fund's share price.
Do Vanguard ETFs have a minimum investment? ›
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.
Is there a minimum amount of money required to invest in ETFs? ›
What's the minimum investment? Because they trade like stocks, ETFs do not require a minimum initial investment and are purchased as whole shares. You can buy an ETF for the price of just one share, usually referred to as the ETF's "market price."
What Vanguard funds have no minimum investment? ›
Exchange-traded funds (ETFs) have no minimum initial investment requirement beyond the price of 1 share. $1,000 for Vanguard Target Retirement Funds and Vanguard STAR® Fund.
What is the minimum requirement for an ETF? ›
Exchange-Traded Funds have no minimum investment requirements. ETFs have fewer tax obligations than mutual funds. Because of the way ETFs are created and redeemed, they provide you tax advantages as an investor.
How much do I need to invest in Vanguard ETF? ›
(Some funds have minimums greater than $3,000 to protect the funds from short-term trading activity.) The minimum investment for Vanguard ETFs® is $1.
What is the downside of ETFs? ›
For instance, some ETFs may come with fees, others might stray from the value of the underlying asset, ETFs are not always optimized for taxes, and of course — like any investment — ETFs also come with risk.
What is the best Vanguard ETF to buy? ›
10 Best-Performing Vanguard ETFs
| Ticker | Company | Performance (Year) |
|---|
| VGT | Vanguard Information Technology ETF | 30.75% |
| VFMO | Vanguard U.S. Momentum Factor ETF | 27.30% |
| VOOG | Vanguard S&P 500 Growth ETF | 26.64% |
| MGC | Vanguard Mega Cap 300 Index ETF | 25.51% |
6 more rowsETFs can be a great investment for long-term investors and those with shorter-term time horizons. They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks.
Does Vanguard charge fees for ETFs? ›
You'll never pay a commission to buy or sell Vanguard mutual funds or ETFs in your Vanguard accounts.
Vanguard is known for its low-cost investment approach, and one way they achieve this is by offering funds with lower expense ratios. The high minimum investment amounts act as a deterrent for short-term, speculative trading, and help keep transaction costs lower for long-term investors.
Does Vanguard have minimums? ›
Minimums & account balances
You don't need thousands of dollars to start investing in an ETF. You can buy a Vanguard ETF for as little as $1. You only need enough money in your settlement fund to cover the cost of the ETFs you want to buy.
How much should I invest in an ETF for the first time? ›
You can put $500 in a stock ETF and $500 in a bond ETF to achieve a diversified two-asset-class portfolio which, though simple, can be a great start toward building a portfolio appropriate for your goals. ETFs can be a simple way to build incrementally toward your long-term plan.
What is the minimum to invest in S&P 500 ETF? ›
What is the minimum investment for the S&P 500? For an S&P 500 index fund, many come with no minimum investment. For an S&P 500 ETF, you might need to pay the full price of a single share, which is generally upwards of $100—but some robo-advisors like Stash offer fractional shares for as little as $5.
Can you make a living from ETF? ›
You can make money from ETFs by trading them. And some ETFs pay out the money the ETF makes to investors. These payments are called distributions.
Why does Vanguard have a 3000 minimum? ›
Vanguard is known for its low-cost investment approach, and one way they achieve this is by offering funds with lower expense ratios. The high minimum investment amounts act as a deterrent for short-term, speculative trading, and help keep transaction costs lower for long-term investors.
Does Vanguard require a minimum balance? ›
Vanguard's account minimum is $0, but keep in mind many mutual funds may require a minimum initial investment. Vanguard funds have minimums that start at $1,000.
Is there a minimum balance for Vanguard money market? ›
All of our money market funds have a $3,000 minimum initial investment. The Vanguard Federal Money Market Fund tied to your brokerage settlement fund has no minimum initial investment amount.
Is there a minimum lot size for ETF? ›
The round lot for exchange-traded securities such as an exchange-traded fund (ETF) is 100 shares, similar to stocks.
