Where Should You Buy Vanguard Funds. How to buy on vanguard

Before the November 2016 presidential election, I deposited $ 8,000 and bought the Index and other Indices such as IWM (Rusell) and QQQ (Nasdaq) – without paying a penny for commission.

How to buy Vanguard funds in Belgium

Investing in index funds, also known as passive investing, is a tried and tested method of increasing your wealth. It is based on the observation that rather than selecting individual stocks and trying to buy and sell at the right time, it is usually more profitable to invest in the stock market as a whole. This is done through a type of investment called an index fund.

The index is like a sack of shares where the rules are very clear which stocks are accounted for and how much you get from each company. The most famous index is the S&P 500, which includes the 500 largest American companies weighted by market capitalization. In Belgium, the main index is BEL 20, which includes the top 20 companies in the country. The index fund invests in companies driven by the index rules.

For most people, passive investing is preferred over an active style of investing such as collecting stocks. The reason is simple: higher profits. Indeed, due to technological advances in recent decades, financial markets have become so efficient that it is extremely difficult to have an advantage over all other investors in the world. Even professional investors face difficulties: research from the European financial regulator shows that the most actively managed funds offered by traditional banks and investment firms do not always win over passive funds. So, you will most likely get a higher return in the long run by investing in index funds such as those offered by Vanguard.

The appeal of Vanguard funds

John Bogle, founder of Vanguard, launched the world’s first index fund in 1975. Since then, the company has grown to become one of the largest investment firms in the world with trillions of dollars invested.

One of the reasons for their great reputation is that the company has always remained true to its core belief in passive investing. By growing and taking advantage of economies of scale, it consistently focuses on lowering the price for its customers, rather than making higher profits. As a result, their index funds are among the cheapest on the market.

And fortunately for us, some of their funds are now also available in Belgium through the selection of ETFs!

Alright, I’m sure. I want to buy Vanguard funds. How do I do this in Belgium?

Indeed, the table below shows that indeed, investors who bought and held from August 2001 to the present, as opposed to those who only held on for a decade, received 7.3% of the annual return for the entire 20 years – which is what young investors now expect.

Where You Can Buy Vanguard Funds (Besides Vanguard)

Due to the popularity of Vanguard mutual funds and ETFs, some large brokerage firms now sell their index funds and ETFs in addition to their own. However, because these companies are also direct competitors of Vanguard, the number of Vanguard funds they offer is often limited. It is also more expensive. For example, you can buy Vanguard’s flagship index fund, the Vanguard 500 Index (VFIAX), through Fidelity, but you’ll pay a transaction fee to get it that way. Fidelity charges a fee because the Fidelity 500 Index (FXAIX) is a competitive fund with identical positions. It is not in Fidelity’s interest to allow investors to easily buy competitor’s funds without additional costs or fees.

The largest broker with the most Vanguard funds available to investors is TD Ameritrade which has complex commissions and various fees from Vanguard funds.

If you buy Vanguard funds directly from Vanguard, you will not incur these additional costs.

Pros and Cons of Buying Vanguard Funds through Other Brokerages

Buying Vanguard funds from other mutual fund companies or brokerage firms is the same as buying any mutual funds or ETFs from a competitor. Overall, the advantages are in the convenience, while the disadvantages are in the fees.

Convenience: Buying from one brokerage house allows you to build your entire portfolio in one company.

easier Tracking: Minimizing the number of accounts you have makes it easier to keep track of your assets.

Diversification: Brokerage firms and fund companies have different strengths. For example, Vanguard is great at indexing but doesn’t have many actively managed funds.

Cost: Paying a transaction fee every time you buy a mutual fund, or a commission every time you buy shares in an ETF reduces your net return. It also beats Vanguard’s main goal of buying funds – low spend!

Limited Choice: While you may find Vanguard funds at other brokerage firms, they likely won’t offer all Vanguard funds.

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