Where Should You Buy Vanguard Funds. Vanguard how to buy

With approximately $ 7.2 trillion in asset management, Vanguard ranks among the top five investment management companies by size. It is well known for its low or free fee products and wide range of mutual funds. A mutual fund helps you diversify your investments and protects your money from market volatility.

Where Should You Buy Vanguard Funds?

Investment advisor discussing Vanguard funds with clients

Kent Thune has spent over two decades in the financial services industry and owns the investment advisory firm Atlantic Capital Investments in Hilton Head Island, South Carolina. He has written hundreds of articles for various outlets, including The Balance, Kiplinger, Marketwatch, and The Motley Fool.

Thomas J. Brock is a CFA and CPA with over 20 years of experience in a variety of areas including investment, insurance portfolio management, finance and accounting, personal investment and financial planning consultancy, and the development of life insurance and annuity education materials.

If you’re looking to buy mutual funds, you’ve probably heard of Vanguard, the world’s largest mutual fund company. Vanguard offers an excellent list of high-quality, low-cost mutual funds and exchange-traded funds (ETFs) free of commission or selling fees (or “charges”).

You have two options to buy Vanguard funds – from a third party brokerage house such as TD Ameritrade or Charles Schwab, or directly through the Vanguard website.

If you already have an account with a third party brokerage firm that offers Vanguard funds, buying them through your broker is the easiest option. However, third party brokers may add fees or restrictions to these purchases. Here’s how to decide.

Key Takeaways

  • The cheapest way to buy Vanguard funds is to use Vanguard.
  • Other large brokers offer limited Vanguard funds, usually with added fees.
  • If you already have a broker, it’s convenient to add Vanguard funds to your portfolio through it.

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.

Vanguard has been working on improving its mobile app recently, but their Android app is very bad. Users speculate that Vanguard does not care about maintaining and updating Android applications. Here are some screenshots of the Vanguard application:

Vanguard 500 Index Fund Admiral Shares

  • Fund Category: Big Mix
  • Assets under management: $ 241.2 billion
  • Efficiency: 1.3%
  • Spending Ratio: 0.04% or $ 4 per year for every $ 10,000 invested

The Vanguard 500 Index Fund Admiral Shares (VFIAX, $ 403.40) became the first Wall Street index fund in 1975 at the behest of Vanguard founder Jack Bogle. Today, it remains one of the most popular ways to gain diversified exposure to the US stock market with a single holding company.

This Vanguard mutual fund is deceptively straightforward, offering investors exposure to 500 mostly US-based large and mid-cap companies that currently include popular stocks such as Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA). In fact, since many of the world’s biggest companies are tech giants like these, information technology makes up about 27% of the entire fund.

Overall, the Vanguard 500 index is viewed as a diversified and profitable base stock for almost any type of investor looking to have exposure to U.S publicly traded companies. This makes it one of the best Vanguard mutual funds for almost any style of investor.

Note: VFIAX also acts as ETF, Vanguard S&P 500 ETF (VOO).

Vanguard Total Stock Market Index Fund Admiral Shares

  • Fund Category: Big Mix
  • Assets under management: $ 257.6 billion
  • Efficiency: 1.3%
  • Spending ratio: 0.04%

Moving beyond just the largest stocks on Wall Street, the Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX, $ 109.58) allows investors to be exposed to approximately 3,800 total positions. As the name suggests, it accounts for almost the entire domestic stock market.

However, as VTSAX is size-weighted, it continues to invest heavily in high-tech stocks, with the sector having the same share (27%) as VFIAX, largely thanks to the same trillion-dollar group of Silicon Valley giants. Moreover, the top 10 positions taken together account for 22% of the total portfolio, despite the fact that thousands of other companies have a fractional stake in this Vanguard mutual fund.

This results in a portfolio with a mix of 70-17-6 large, medium and small for VTSAX, compared to the 85-15-0 for VFIAX – thus slightly more diversified in size but still tied to large-cap stocks. But that’s enough that many investors prefer the Vanguard Total Stock Market Index to the Vanguard 500.

Note: VTSAX also acts as ETF, Vanguard Total Stock Market ETF (VTI).

Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX, $ 11.42) is one of the best Vanguard mutual funds for fixed income investors. This is a huge, simple and inexpensive way to gain broad exposure to US investment grade bonds.

Vanguard at A Glance

  • It offers both self-managed and robo-advisers depending on what type of investor you are.
  • You can choose the right account based on your needs, including Individual and Joint Tax, Traditional and Roth IRA, SEP and SIMPLE IRA, 529s, UGMA and Trusts.
  • Many types of investments are available, including stocks, bonds, options, ETFs, mutual funds, and other services.
  • Mostly no fees, except for some mutual funds and options that have transaction fees.

If you choose to invest through Vanguard, you have thousands to choose from:

You cannot invest in fractional ETFs from Vanguard. Only full shares are available. Investing in fractional stocks allows investors to determine how much they want to invest in a share by buying a portion of it without buying the entire share.

Vanguard Fees

Avant-garde has

Who Is Vanguard Best For?

Vanguard is best for new investors or those who don’t want to spend a lot of time managing their investment accounts. While it is a good idea to review your investment accounts at least once a year, you don’t need to spend a lot of time tinkering with your Vanguard investments.

Visit the Vanguard investor website and click “open an account” to get started. If you already have an account elsewhere, you can select “start transfer or rollover”. If you want to open a new account from scratch, select “create a new account.”

Rate article